Question
Question B1 Z plc manufactures three products which have the following selling prices and costs per unit: Z1 Z2 22 Z3 Selling price 15.00
Question B1 Z plc manufactures three products which have the following selling prices and costs per unit: Z1 Z2 22 Z3 Selling price 15.00 18.00 17.00 ---- Direct materials 4.00 5.00 10.00 Direct labour 2.00 4.00 2.00 Overhead: Variable Fixed Profit per unit 1.00 2.00 0.90 4.50 3.00 1.35 11.50 14.00 14.25 3.50 4.00 2.75 All three products use the same type of labour. However labour is in short supply only 500 hours of labour are available. Labour is paid at 8.00 per hour. The maximum sales demand for each product Z1, Z2 and Z3 is 800 units (a) Establish the optimum production plan for Z plc. Clearly showing the number of Z1, Z2 and Z3 should be produced. [9] (b) Explain the management accounting technique Throughput Accounting [5] and discuss whether it would be appropriate for Z plc. (c) Explain Zero Based Budgeting and Incremental Budgeting stating which would be more appropriate for Z plc. [6]
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