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Kak Ton produces and sells four scarves Juwita, Lola, Warda and Erina. Selling prices and costs per unit are as follows: Product Juwita Lola Warda
Kak Ton produces and sells four scarves Juwita, Lola, Warda and Erina. Selling prices and costs per unit are as follows: Product Juwita Lola Warda Erina RM RM RM RM 364 Selling price 280 272 292 Variable Costs: Direct materials (RM3 per metre) 60 36 42 48 Direct labour 48 54 Variable overheads 12 14 16 Kak Ton plans to produce and sell the following quantities of the products in the forthcoming period: 60 54 14 Product Quantities (units) Juwita 800 Lola 1,200 Warda 900 Erina 1,000 Since preparing the above sales plan, Kak Ton has been advised that it will be able to purchase a maximum of 50,000 metres of direct materials in the forthcoming period. Required: (i) Calculate the contribution per unit for each product. (4 marks) (ii) Compute the total contribution for each product based on the original sales plan (3 marks) (iii) Determine the profit maximizing plan taking into account the restricted amount of materials that can be purchased. (8 marks) (iv) Calculate the total contribution for each product based on the plan in question (iii)
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