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I've an accounting assessment tomorrow and I've no idea how to prepare a decision making quesion, the notes I have are useless. If you help
I've an accounting assessment tomorrow and I've no idea how to prepare a decision making quesion, the notes I have are useless. If you help explain how you got each number id appreciate it. Thank you in advance.
Q1. DECISION MAKING White Limited manufactures and sells three different products. For the coming year it has produced the following information: Product B211 A10 per unit per C32 per unit Selling Price Direct Materials Direct Labour (Note 1) Variable overhead Fixed overhead (Note 2) Net Profit 159 67 32 24 16 20 unit 125 72 16 12 16 9 147 71 24 18 16 18 Sales (units) 20,000 15,000 22,000 Note 1: Direct Labour costs are 16 per hour. Note 2: Fixed overheads are not product specific. Required: (a) Calculate the shortfall in labour hours for the coming year, assuming hours are limited to 80,000 (4 Marks) (b) Calculate the budgeted profit for the year assuming no restriction on labour. (10 Marks) Calculate the maximum profit for the year assuming that the company is restricted to 80,000 labour hours. (18 Marks) Briefly outline THREE reasons why the company should buy in the product they cannot make, if the option was available. (6 Marks) Briefly outline ONE concern White Limited may have with buying in the product they cannot make, if the option was available. (2 Marks) (d) (e)
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