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Mandatory Question A company has 4,000 machine hours of plant capacity per month which are to be allocated to products A and B. The following

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Mandatory Question A company has 4,000 machine hours of plant capacity per month which are to be allocated to products A and B. The following per unit figures relate to the products: Product . B Sale Price 300 240 Costs: Direct Material 100 70 Direct Labour 65 50 Variable Overhead 20 40 Fixed Overhead 15 30 Variable Operating Expenses 40 20 Total Costs 240 210 Net Income 60 30 Machine Hours Required 1.5 1.00 REQUIRED: a. Assuming that the company can sell all its products A output but only 3,500 units of product B, determine how many machine hours shall be allocated to each product. [7 marks] b. Calculate optimal product mix. C. How much is total contribution in terms of money? [6 marks] [4 marks]

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