Question 4: Colliford Lake Reservoir makes three electronic products for the consumer market. It currently makes three products, Product A, Product B and Product C. Cost and sales information are given below. The company overheads are listed below. These overheads are required irrespective of what is made or not made. The working week is 37 hours. There are 46 working weeks to the year however all production workers, of which there are 59 , are on full time contracts and are hence paid for 52 weeks of the year. Each employee is paid 11.25/ hour. Questions: a) What is the Gross Margin for each of the three products [2 marks each = 6 marks] a) What annual profit does the company make? a) What annual profit does the company make? b) What is the annual profit the company is currently making [4 marks] c) If all the overheads are to be recovered against labour hours what is the hourly overhead rate? [4 marks] d) Using this information what is the fully absorbed cost and profit per product of each product? [6 marks] e) How much additional profit does the company make if it were to make one more of each product? [3 marks] f) Which product should it make more of? [2 marks] Question 4: Colliford Lake Reservoir makes three electronic products for the consumer market. It currently makes three products, Product A, Product B and Product C. Cost and sales information are given below. The company overheads are listed below. These overheads are required irrespective of what is made or not made. The working week is 37 hours. There are 46 working weeks to the year however all production workers, of which there are 59 , are on full time contracts and are hence paid for 52 weeks of the year. Each employee is paid 11.25/ hour. Questions: a) What is the Gross Margin for each of the three products [2 marks each = 6 marks] a) What annual profit does the company make? a) What annual profit does the company make? b) What is the annual profit the company is currently making [4 marks] c) If all the overheads are to be recovered against labour hours what is the hourly overhead rate? [4 marks] d) Using this information what is the fully absorbed cost and profit per product of each product? [6 marks] e) How much additional profit does the company make if it were to make one more of each product? [3 marks] f) Which product should it make more of? [2 marks]