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QUESTION 4 (25 MARKS) ABC Company produces three products, X, Y and Z. All these products require processing on specialized finishing machine. The capacity of

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QUESTION 4 (25 MARKS) ABC Company produces three products, X, Y and Z. All these products require processing on specialized finishing machine. The capacity of these machines is 2,202 hours per month and the monthly fixed costs are RM30,000. The company wishes to determine the product mix that should be achieved to meet the high demand for each product and provide the maximum profit. Following is information about each product: Product Y RM117 Product X RM148 103 3 hours 450 Selling price Variable costs Machine time per unit Demand per month (units) 60 Product Z RM39 28 1 hour 760 3 hours 290 Required: a. Identify the amount of shortfall for the limiting factor in the production. (5 MARKS) b. Compute the contribution margin per limiting factor of each type of products. (9 MARKS) c. Determine the optimum production plan by showing the production priority ranking (5 MARKS) d . Prepare a profit statement according to the production plan in part (C). (6 MARKS)

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