Question
QUESTION ONE [25 Marks] Souvenir Ltd makes two kinds of albums - 'Ordinary' and 'Deluxe'. The following cost details are available for the year
QUESTION ONE [25 Marks] Souvenir Ltd makes two kinds of albums - 'Ordinary' and 'Deluxe'. The following cost details are available for the year 2019. What shall be the price of these albums if $3 and $6 are the expected profits on each 'Ordinary' and 'Deluxe' albums respectively? Quantity manufactured Materials ($) Wages ($) Direct expenses ($) Ordinary Deluxe 25,000 12,000 3,140 2,650 9,400 5,700 2,100 1,410 Factory supervision charges to be distributed in proportion to direct cost is $ 3,600; packing expenses to be distributed in proportion of work cost is $ 400; and selling expenses to be distributed in proportion of quantity manufactured is $4,440. At what price do you think Souvenir Ltd can sell these albums.
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