Case: 1 The following particulars are extracted from the records of a company. Product B Particulars Sale price per unit Consumption of material Material cost Direct labour cost Direct expenses Machine hours used Fixed overheads per unit Variable overheads per unit Product A OMR 100 2 kg OMR 120 3 kg OMR 15 10 OMR10 15 5 3 2 OMR 10 20 OMR 5 15 Direct labour per hour is OMR 5. Comment on the profitability of each product [both use same raw material) when, I] total sales potential in units is limited II] total sales potential in value is limited III] raw material is in short supply IV) production capacity [in terms of machine hours] is limited. Assuming raw material as the key factor, availability of which is 10,000 kg and maximum sales potential of each product being 3500 units, find out the product mix which will yield maximum profits.

Case: 1 The following particulars are extracted from the records of a company. Product B Particulars Sale price per unit Consumption of material Material cost Direct labour cost Direct expenses Machine hours used Fixed overheads per unit Variable overheads per unit Product A OMR 100 2 kg OMR 120 3 kg OMR 15 10 OMR10 15 5 3 2 OMR 10 20 OMR 5 15 Direct labour per hour is OMR 5. Comment on the profitability of each product [both use same raw material) when, I] total sales potential in units is limited II] total sales potential in value is limited III] raw material is in short supply IV) production capacity [in terms of machine hours] is limited. Assuming raw material as the key factor, availability of which is 10,000 kg and maximum sales potential of each product being 3500 units, find out the product mix which will yield maximum profits.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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A. Manufacturing margin? b. Contribution margin? C. Operating income for PhiladelPho's company ?
3
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Question 1 (i) A cost that can be traced to a cost object is known as A. A fixed cost B. A variable cost C. A direct cost D. An indirect cost (ii) Which of the following terms denotes the response of a cost to change in business activity: A. Cost accumulation B. Cost apportionment C. Cost reapportionment D. Cost behaviour (iii) Production of 100 units requires one supervisor at £30,000 p.a. If production is between 100-200 units then two supervisors are required at a total of £60,000 p.a. Such cost behaviour would be described as: A. Fixed B. Stepped fixed C. Variable D. Semi-variable
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