Question 4 a. Explain in detail different types of pricing strategies that can be adopted by companies to maximise their protability. (5 Marks} b. Richard Ltd makes three products, So'ya= Milcgg and Yoghurt. All the three products must be offered for sale each month _i_r_1__or_'dr_e_r__t_o provide a complete market service. The products are fragile. and their quality deteriorates rapidly shortly after production. The products are produced on two types of machine and worked on a single grade of direct labour. Fifty direct employees are paid 8.00 per hour for a guaranteed minimum of 160 hours per month. All the products are first pasteurised on a machine type A and then finished and sealed on a machine type B. The machine hour requirements for each of the products are as follows: I Soya W5; Yoghurt Hours per unit Hours per unit Hours per unit Machine Type A 1.5 4.5 3.0 Machine Type B 1.0 2.5 2.0 The capacity of the available machines type A and B are 6.000 horns and 5.000 hours per month respectively. Details of the selling prices. unit costs and monthly demand for the three products are as follows: The capacity of the available machines type A and B are 6,000 hours and 5.000 hours per month respectively. Details of the selling prices, unit costs and monthly demand for the three products are as follows: Soya MM Yoghurt per unit per unit per unit Selling price w LE Concentrate cost 220 190 160 Other direct material cost 230 l 10 140 Direct labour cost @ 8.00 per hour 60 480 360 Overheads E Q E Profit @ m E Maximum monthly demand (nnits}_ 1200 700 600 mg; Richard Limited uses marginal costing and contribution analysis as the basis for its decision making activities, prots 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. You are required to: a. Calculate the monthly machine utilisation rate for each product and explain vvhich machines is the bottleneck flimiting factor. ( b. Use current system of marginal costing and contribution analysis to calculate the prot maximising monthly output of the three products. c. Explain why throughput accounting might provide more relevant I information in Richard's circumstances. d. Use a throughput approach to calculate the throughput maximising monthly output of the three products e. Explain the throughput accounting approach to optimising the level of inventory and its valuation. Contrast this approach to the current system employed by Richard