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Question 1 (16 marks) ABC Company (ABC) is Namibian based company that produces three products, A, B, and C through a process costing system. All
Question 1 (16 marks) ABC Company ("ABC") is Namibian based company that produces three products, A, B, and C through a process costing system. All the three products pass through process 1 which only has an hourly capacity to produce 1 200 units of A, 1 500 units of B and 600 units of C. The process operates eight hours in a day. The following information relates to the three products: Product A B Selling price per unit (N$) 150 120 300 Material cost per unit (N$) 70 40 100 The three products combined incur a conversion cost of N$720 000 per day. Mark 4 8 Requirement Determine the total amount of profit available to ABC if they are able to produce 6 000 1.1 units of A, 4 500 units B and 1 200 units of C per day. 1.2 Calculate the throughput ratio for each product. 1.3 Assuming the three products have unlimited demand, advise ABC on how to optimise their production. N. B. Where necessary, show all the relevant workings Total 4 16
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