Management Accounting

Following information has been made available from the cost records of Toyo Auto Bhd., manufacturing spare parts:

Particulars	Brakepad	Gear
Direct Material	RM 8	RM 6
Direct Labour	24 hours @ RM0.25 per hour	16 hours @ RM 0.25 per hour
Selling Price	RM 25	RM 20
Variable Overhead	150% of direct labour
Fixed Overhead	RM 750

The directors want to be acquainted with the desirability of adopting any one of the following alternative sales mixes in the budget for the next period:

1. 150 units of Brakepad and 350 units of Gear
2. 350 units of Brakepad and 150 units of Gear
3. 400 units of Brakepad and 100 units of Gear
4. 100 units of Brakepad and 400 units of Gear
5. 250 units of Brakepad and 250 units of Gear
6. 300 units of Brakepad and 300 units of Gear
7. 500 units of Brakepad only
8. 500 units of Gear only

REQUIRED;

(a) Compute the net profit for each of the above alternatives.

(b) Choose the best alternative for the management.