Q12

IKS has a production capacity of 5,000 hours that can be used to produce products A or B. The following data is available:

	Product A	Product B
Unit selling price	27$	30$
Unit raw material	9$	7$
Unit direct (variable) labour	5$	5$
Indirect unit variable manufacturing costs	3$	6.50$
Unit fixed manufacturing indirect costs	7$	5$
Production time	2 hours	0.5 hours

If the company chooses to manufacture only A, what is the margin on total variable cost of product A taking into account the constraint (5,000 hours)?

Options for Question 12:

	50 000 $
	No answer is suitable
	25 000 $
	100 000 $
	32 500 $