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Q2. Al Azia Company, a leading fertilizer manufacturer has asked you to submit a cost-volume-profit analysis report for the two products being produced in your
Q2. Al Azia Company, a leading fertilizer manufacturer has asked you to submit a cost-volume-profit analysis report for the two products being produced in your company. (55 marks) Particulars Product A Price per unit (RO) 35 Product B Price per unit (RO) 25 16 17 5 Sales price Material Direct wages Variable expenses Fixed 3 100% of direct wages 100% of direct wages expenses RO 1,500 The following scenarios are predicted by the Management: Scenario 1: 200 units of product A and 100 units of product B Scenario 2: 150 units of product A and 150 units of product B Scenario 3: 250 units of product A and 50 units of product B You are required to: a. Compute the contribution per unit of both Product A and Product B. Find out total contribution and profits for each of the scenario. (15x3 = 45 marks) In your opinion which is the most profitable scenario and justify your recommendation. b. In your opinion which is the most profitable scenario and justify your recommendation. Note : Please I want in-depth thinking. Explanation s are very clear and there are no spelling, and grammar mistakes. Sentences are properly framed and analyses are deep
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