Styles Question 6 Pantupa Ltd manufactures a wide range of spices. The purchasing manager at Pantuna Ltd has recently been approached by a new manufacturer in India offering to supply three of the spices. The following information has been provided by the accountant: B Spices Production (kg) 18,000 36,000 OMR OMR 50,000 OMR 4 10 2 3 9 9 4 6 2 Direct material cost, per kg Direct labour cost, per kg Direct expense cost, per kg Fixed cost per kg Selling price per kg Imported price per kg 8 2 4 22 30 30 20 16 26 Required a) Calculate the profit that the company will make by producing all of the spice products. (6 marks) b) Recommend to management whether any of the spices should be purchased from the overseas Indian supplier on the basis of cost only. (6 marks) c) How will your recommendation in (b) above affect the profit and by how much? (5 marks) d) Discuss other factors that management should consider before making a final decision (8 marks) (Total 25 marks) End of Exams Paper D'Focus