M Notes - cmbaseplgmailom - X + V X (- -) C H mail.google.comfmai|fuf0tab:rmStogbl-finbofoMfcgszvBmMIEDQRdzDMjMtmLkCqur?projector:1BtmessagePartld:0.'l 1. A processing company, Meel Ltd, is extremely busy. It has increased its output and sales 'om [2,900 kg in 1'l quarter ofthe year to [7,300 kg in the 2'\"l quaner. Although demand is still rising, it cannot increase its output more than an additional 5% from its existing labour force, which is now at its maximum. Data for its four products P, Q, I1 and S inlndquarter were: Products P Q R 5 Output (Kg) 4,560 6960 3480 2300 Selling price (Sh. Per kg) 162.00 \"6.40 99.20 [36.80 Costs (Slt. Per kg] Direct labour @ Shoo per hour) [9.60 [3 .00 9.90 [7.00 Direct materials 65.20 49.00 41.00 54.20 Direct packaging 8.40 7.40 5.60 7.00 Fixed overheads M M w M Q M E _112-2 Kamal Ltd has offered to supply 2000 kg of product Q at a delivered price of 90% of the Meel's Ltd. Selling price. Meel Ltd. will then be able to produce extra of product P instead of product Q to the plant's total capacity. Required: a) State with supporting calculations, whether Meel should accept the Kamal's offer b) Which would be the most profitable combination of sub-contracting 2000kg of one product at a price of 90% of its selling price and producing extra quantities of another product up to the plant total capacity? Assume that the market can absorb the extra output. 2. Write short distinguishing notes on the following (i) Cost object and cost tracing, (ii) Duration cost driver and Intensity cost driver, (iii) Responsibility accounting and Interlocking accounting