Question
The monthly demand for this product varies from one month to the other. During the month of of October 2019, 1000 units were produced incurring
The monthly demand for this product varies from one month to the other. During the month of of October 2019, 1000 units were produced incurring the following expenses: Shs 000 Direct materials 60 Direct labour 80 Rent(Fixed) 50 Electricity (40% fixed) 54 Property taxes and rates (80% variable) 100 Technical support(Fixed) 56 400 i) Using accounts analysis formulate the total cost function (4 marks) ii) During the month of November, Basrif ltd estimates to produce 1620 units. Calculate the estimated cost in December 2019. (2 marks) iii) Discuss TWO weaknesses of the method youve used in part (i) and (ii) above (2 marks)
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