QUESTION 4 [25 MARKS] FastScan Limited makes and sells three types of electronic security systems for which the following information is available. Standard cost and selling prices per unit Product Materials Manufacturing labour Installation labour Variable overheads Selling price Day Night Omni Scan Scan Scan Rs Rs Rs 700 1,100 1,550 400 550 700 240 320 440 160 200 280 2,500 3,200 4,600 Fixed costs for the period are Rs4,500,000 and the installation labour, which is highly skilled, is available for 25,000 hours only in a period and is paid Rs80 per hour. Both manufacturing and installation labour are variable costs. The maximum demand for the product is: Day scan 2,000 units Night scan Omni scan 3,000 units 1,800 units REQUIRED (a) Calculate the shortfall (if any) in hours of installation labour. [4 Marks] (b) Determine the best production plan, assuming that FastScan Limited wishes to maximise profit. (c) [7 Marks] Calculate the maximum profit that could be achieved from the plan in part (b) above. [3 Marks] Having carried out an investigation of the availability of installation labour, the firm thinks that by offering Rs120 per hour, additional labour would become available and thus overcome the labour shortage. Page 7 of 9 7/9 REQUIRED (d) Based on the results obtained above, advise the firm whether or not to implement the proposal. [5 Marks]