Question 5 please

A27 : X fx A B D E F G H 1 Question 5 (6 marks) IN XYZ produces chairs in two operations: machining and finishing. It provides the following information: Machining Finishing 00 . Annual capacity 90000 85000 9 Annual Production 85000 85000 10 11 Fixed Operating Costs $ 5,500,000 $ 2,750,000 12 13 Each chair sells for $500 and has a material cost of $300 incurred at the onset of machining 14 15 XYZ can sell as many units as it produces. 16 17 XYZ is considering upgrading the finishing equipment at a cost of $1,250,000 annually. It will increase annual 18 finishing output by 10000 units + 19 20 a) Should this equipment be purchased 21 22 b) Ignore option a - XYZ produces 6000 defective units at the finishing operation. What is the cost to ABC 23 24 c) - ignore option a- XYZ produces 6000 defective units at the machining operation. What is the cost to ABC 25 26 Question 6 (7 marks) 27 28 ABC Company produces 2 products X and Y 29 Construction of these involves going through 2 processes: materials handling and 30 assembly 31 32 The following are the costs and resources required to complete X and Y 33 34 Materials Assembly Selling cheatsheet |Q12 |Q34 Q56 o Type here to search e Da W X X F2 F3 F4 F5 F6 Ho F7 PrtSen F8 a 5