QUESTION 1 KUMA makes three products X, Y, and Z. All three products must be offered for sale cach month in order to provide a complete market service. The products are fragile and their quality deteriorates rapidly once they are manufactured. The products are produced on two types of machine and worked on by a single grade of direct labour. Five direct employees are paid Ghe 8 per hour for a guaranteed minimum of 160 hours each per month All of the products are first molded on a machine type 1 and then finished and sealed on a machine type 2 The machine hours requirements for each of the products are as follows. Prodhue x Product Y Product Z Hours per unit Hours per unit Hours per unit Machine type ! 4.5 3.0 Machine type 2 2.5 2.0 The capacity of the available machine type 1 and 2 are 600 hours and 500 hours per month respectively. Details of the selling price, unit cost and monthly demand for the three products are as follows 1.5 1.0 Product H Ghe per unit Selling price Component cost 22 Other direct material cost Direct labour cost at per hour 6 Overheads 24 Profit 16 Product Y Ghe per unit 174 19 11 48 62 34 Product C Ghc per unit 140 16 14 36 52 22 70 60 Maximum monthly demand units 120 Although KUMA uses marginal costing and contribution analysis as the basis for its decision- making activities, profits are reported in the monthly management accounts using the absorption costing basis. Finished goods inventories are valued in the monthly management accounts at full absorption cost. Required: a. Calculate the machine utilization rate for each machine each month and explain which of the machine is the bottleneck/limiting factor (7 marks) b. Using the current system of marginal costing and contribution analysis, calculate the profit maximizing monthly out put of the three products. (8 marks) (Total 15 marks)