Performance management Topic 2.1: Short term decision making technique

Question 3 Pot Ltd. manufactures 3 components, CX1, CX2 and CX3, using the same materials for each component. The production and assembly requirement for all the three components are 5,000 units for each component. The variable production costs per-unit of the nal product, CXR is as follows: - Material k er-unit $ 1 unit of CXl 4 48.00 1 unit of CX2 6 72.00 1 unit of CX3 5 60.00 Assembly costs w 225.00 Only 65,000kg of material is available and a sub-contractor has offered the following unit prices for supplying the components; CXl at $58, CX2 at $80 and CX3 at $68. Required: Advice Pot Ltd. Question 4 Harolds fashion store comprises three departments Men's wear, Ladies' wear and Unisex. The store budget is as follows: Men's Ladies' Unisex Total $ $ $ $ Sales 40,000 60,000 20,000 120 000 Direct cost of sales 20,000 36,000 15,000 "1,000 Department costs 5,000 10,000 3,000 18,000 Apportioned store costs 5,000 5,000 5,000 15,000 ProtKLoss) 10,000 9,000 (3,000) 16,000 It is suggested that Unisex be closed, to increase the sales in Men's and Ladies' department. Required: Evaluate the proposal to close the Unisex department and discuss what information will be relevant or irrelevant for this decision