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Please answer all the parts - Answers will not be accepted if any of the part is missing QUESTION 4 (20) 4.1 REQUIRED Study the
Please answer all the parts - Answers will not be accepted if any of the part is missing
QUESTION 4 (20) 4.1 REQUIRED Study the information given below and answer the following questions: 4-1-1 should Boardmans Limited accept or reject the special order? Substantiate your answer by calculating the additional profit or loss from the sale. (8) 4-1.2 Would Boardmans Limited make a profit or loss if it sold all the toasters (6 600 units) at R280 per unit? Show your calculations. (6) INFORMATION Boardmans Limited manufactures toasters. It expects to make and sell 6 000 toasters in 10 batches of 600 units per batch during the coming year. Expected production costs are summarised below: Budgeted costs for the expected production of 6 000 toasters R Unit-level costs (6000 units) 1 0800 000 Material costs 540 000 Labour costs 495000 overhead costs 45000 Batch-level costs 66 000 Assembly set-up (10 batches X R5 100) 51 000 Materials handling (10 batches X R1 500) 15 000 Other costs 829 500 Salaries 574 500 Depreciation 81 900 Administrative and other fixed costs 173 100 Total expected cost 1975 500 Cost per unit 329.25 ADDITIONAL INFORMATION The selling price per toaster is R400. Boardmans Limited received a special order from a new customer for 600 toasters. If Boardmans Limited accepts the order, the sales would increase from 6 000 to 6 600 units. The firm has excess capacity to produce the 600 units. The special order customer is willing to pay only R280 per unit
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