Question 1:Asan Ltd manufactures two products. The following budgetedinformation relates to each product.ProductAlpha7012ProductBetaSelling Price Per UnitDirect Materials Cost Per UnitCost per kg of materialDirect Labour Hours Per UnitDirect Labour Wage Rate Per HourVariable Overheads Per UnitProduction and sales per month (units)Fixed overheads per month902046.3780092000310043000RequiredCalculate the following for each Product, based on the information givenabove:a.i.Contribution per uniti.Break even point in terms of Sales Units and Sales Revenuei.Margin of Safety as a % of normal productioniv.Budgeted Profit per monthThe production manager has been warned that there could be a shortfall ofmaterial during the next month due to transportation strike. He estimates thatthere will be 20,000 kilograms available. Calculate the amount of units thatshould be produced in order to maximise profit/minimise loss and calculatethe estimated profit/loss figure for the next month.b.You have just taken on a new Finance Manager has not come across theterms in part a) of this question. Please draft short memo to him explainingeach of the figures calculated in part a). Ensure you explain which is thebetter product and why.с.

Name: Question 1:Asan Ltd manufactures two products. The following budgeted
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Description: Question 1:Asan Ltd manufactures two products. The following budgetedinformation relates to each product.ProductAlpha7012ProductBetaSelling Price Per UnitDirect Materials Cost Per UnitCost per kg of materialDirect Labour Hours Per UnitDirect Labour

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Business

Accounting

Contribution per unit Break even point in terms of Sales Units and Sales Revenue Margin of Safety as a % of normal production Budgeted Profit per month

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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