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Particulars Baby soap (BS) OMR 1 to 2 Beauty soap (PS) OMR 1.5 to 2.5 Medicated soap (MS) OMR 2.5 to 3.5 Selling Price

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Particulars Baby soap (BS) OMR 1 to 2 Beauty soap (PS) OMR 1.5 to 2.5 Medicated soap (MS) OMR 2.5 to 3.5 Selling Price per pair Material cost (RO 0.25 per soap) Direct Labour (OMR 0.025 per hour) Machine Hours (OMR 0.35 per hour) Expected Demand for June (no of soaps) 0.50 (2 units) 0.75 (3 units) 0.050(2Hours) 0.140(4 MH) 5,000 0.10(4 hours) 0.35(IMH) 8,000 1(4 units) 0.150(6 hours) 0.70 (2MH) 2,500 Company has got a special-order of 1000 soaps for each product from LuLu hypermarket who are their regular customers but at a discount price of OMR 0.250 for each product. This special order is not included in the above demand. Hemas generally has sufficient resources to meet the demand but because of the limited supply from their regular supplier, the company has following resources available for the month of June. Direct Material Direct labour Machine Hours Question 2 Required: 53,250 units 54,000 Hours 45,000 Hours a) What do you understand by limiting factor, evaluate the concept of outsourcing when resources are limited? 3 Marks b) Calculate the optimum production Plan for Hemas company for the month of June, assuming that the special order of the regular customer will be supplied in full. c) What is the total contribution for the month of June? 8 Marks 4 Marks

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