Sloan Limited currently produces three main product lines (see below). The company uses an absorption costing system and the following information relates to the current year, 2012.

Budgeted Sales (Units)	10,000	4,000	6,000
Product Line	Suits	Winter Coats	Rain Coats	Total
	000s	000s	000s	000s
Sales Revenue	300	200	150	650
Direct Materials	100	40	60	200
Direct Labour	50	70	80	200
Production Overheads	75	30	35	140
Non-production Overheads	15	10	5	30
Total costs	240	150	180	570
Profit(Loss)	60	50	-30	80

Additional Information

The total production overhead of 140,000 consists of 40,000 variable costs

and 100,000 fixed costs. Variable production overheads are absorbed on

the basis of 20% of the direct labour costs.

The non-production overhead of 30,000 is entirely fixed costs.

Assume there is no change in inventory levels.

1a) With regard to financial calculations ONLY should any of these production lines be closed?

Explain your decision with calculations.

1 b) Discuss any other issues (qualitative factors) , which should be considered before deciding.

1ci ) If Sloan Ltd has only 120,000 of direct labour available due to industrial action , what is the maximum profit that would be possible under this scenario? (show your calculations)

1cii) If Sloan Ltd has only had 65,000 of direct material available due to a shipping accident what is the maximum profit that would be possible under this scenario? (show your calculations)