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SECTION A Answer this COMPULSORY question Question 1 (Relevant Costing) Mahogany Timbers Ltd (MTL) manufactures boardroom tables (ALPHA) for industry. In the coming year,
SECTION A Answer this COMPULSORY question Question 1 (Relevant Costing) Mahogany Timbers Ltd (MTL) manufactures boardroom tables (ALPHA) for industry. In the coming year, the company plans to sell 220,000 ALPHA tables, which is the maximum expected demand for this type of boardroom table globally. The variable cost and selling price data for ALPHA is as follows: Product ALPHA Materials per unit (8.00 per kg) 560 Labour (15 hours per unit) 285 Variable overheads per unit 580 Total variable costs 1,425 Selling price 2,890 Fixed overhead costs are predicted to be 290,000,000 in the coming year. Having built a new plant to increase manufacturing capacity, MTL is planning on introducing new models of boardroom table BETA and DELTA which will serve new markets for integrated computing and socially distanced requirements. These other products (BETA and DELTA) use the same materials but different types of labour to the current ALPHA product range. QUESTION CONTINUES ON NEXT PAGE
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