Q5. Cambelt Replacement Ltd produces cambelts for cars which sells for 150. The materials to make one cambelt cost 60 and it requires three hours to make. Cambelt Replacement Ltd exhibits 60,000 of fixed overheads and pays employees 25 per hour. The company has been approached by a well established car manufacturer to supply a variation of their standard product. This one of contract requires 600 labour hours. It is expected that materials would cost 5,400 excluding a special component which can either bought externally or made internally. Cambelt Replacement Ltd could buy this special component for a total cost of 1,200. Alternative it would cost 600 and take 24 labour hours to make internally Required: a) Advise the company whether or not they should outsource the production of the special component and whether they can achieve a 15% mark-up profit assuming a target profit of 2,000. Aldershot Ltd makes two products and has supplied you the following information with respect to their cost and sales: A B Material required: X (kg) 2 Y litres) 1 Labour hours required: Skilled (hours) 4 Semi-skilled (hours) Sales (units) 2,000 1,500 Opening inventory 100 200 3 4 UN Aldershot Ltd operates a policy to maintain closing inventory of materials and finished goods at 10% of demand. Opening inventory of material X was 300Kg and for material Y was 1,000 litres. Material X costs 10 per kg and material Y costs 7 per litre. Aldershot Ltd pays skilled labour 12 per hour and semi-skilled labour 8 per hour. Required: b) Produce the following budgets: 1. Production (units) 2. Materials usage (kg and litres) 3. Material purchases (kg, litres and ) 4. Labour (hours and )