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Your company is about to introduce two new products, a large and a small handbag, into the market. The sales manager asked for your assistance
Your company is about to introduce two new products, a large and a small handbag, into the market. The sales manager asked for your assistance in calculating the seling price per units. You received the following information from the production manager The direct manufacturing information is as follows: Handbags large Handbags - smal R125.00 per 2 kg's per kg R7 s per unit kg Hours per Hours unit TURN OVER] OCTOBERINOVEMBER 2018 PORTFOLIO EAMINATION The production manager does not know how to deal with manufacturing overheads. You have just completed the costing module of your PGD diploma and leamed about traditional and activity-based allocation methods. You gathered the following manufacturing overhead information: Manufacturing overheads per department uring otal budgete cost Allocation base Labour Hours No of Inspections The estimated production information per handbag is as follows: Total Budgeted Manufacturing Assembly ality Control hours per unit 1 hour per unit Handbag - small 1 hours per unit hours per unit Pricing Policy: The company's pricing policy is 35% mark-up on total product cost
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