Question 1 (topic 8: Pricing and product mix decisions) Company A produces two products X and Y with contribution margins of $30 and $25 respectively. The company has a maximum of 1200 machine hours and 3000 labour hours per month. Product X requires 1 machine hour per unit while product Yrequires 2 machine hours per unit. Product X requires 3 direct labour hours per unit while product Y requires 2 direct labour hours per unit. Required: a. Determine the number of product X and Y to be produced to maximise the contribution margin. b. What is the value of the objective function' at the optimal point? (3 marks) The following costs were incurred for Delta Limited to maintain the quality of its products: a. Repairs to faulty products returned by customers, $12000 b. Cost of rewelding faulty joints discovered during processing, $3 800 C. Cost of recalling faulty products, $20 000 d. Product inspection into finished goods warehouse, $3 400 e. Cost of faulty goods that were scrapped, $16 800 Required: 1. Define internal failure costs, external failure costs, appraisal costs and prevention costs in terms of costs of quality. (4 marks) 2. For the above costs identify the cost category it should belong to. (5 marks) Question 1 (topic 8: Pricing and product mix decisions) Company A produces two products X and Y with contribution margins of $30 and $25 respectively. The company has a maximum of 1200 machine hours and 3000 labour hours per month. Product X requires 1 machine hour per unit while product Yrequires 2 machine hours per unit. Product X requires 3 direct labour hours per unit while product Y requires 2 direct labour hours per unit. Required: a. Determine the number of product X and Y to be produced to maximise the contribution margin. b. What is the value of the objective function' at the optimal point? (3 marks) The following costs were incurred for Delta Limited to maintain the quality of its products: a. Repairs to faulty products returned by customers, $12000 b. Cost of rewelding faulty joints discovered during processing, $3 800 C. Cost of recalling faulty products, $20 000 d. Product inspection into finished goods warehouse, $3 400 e. Cost of faulty goods that were scrapped, $16 800 Required: 1. Define internal failure costs, external failure costs, appraisal costs and prevention costs in terms of costs of quality. (4 marks) 2. For the above costs identify the cost category it should belong to