a. Calculate the contribution of each product? b. Use your findings from part (a) explain whether the company should stop making Laptop?c. Use your findings from part (a) explain whether the company should stop making Ipad?d. Do you agree that profitability will improve by ceasing to make Products laptop and Ipad? What do you suggest the company does to increase profitability? You work for Zebra Holdings Plc as a junior management accountant.The board of directors are considering ways to improve the suboptimal performance of aninvestment in a manufacturing company called ZA products Ltd.From the table below the Board of Directors are considering halting the production of 2 of theirproducts that appear to be making no profit.You spot that marginal costing would show the results differently and may affect the directors'decision.SalesCost of saleProfit /(Loss)MaterialLabourOverheadsLaptop Total(£m)(£m)15,623.00 8,543.00 9,849.00 34,015.00Computer(£m)Ipad(£m)-4,876.00 -4,344.00-5,125.20 -4,815.60-2,234.00 -2,234.003,387.80 -2,850.603,254.00 12,474.005,216.40 15,157.20-6,702.002,234.00-855.40-318.20

Contribution margin : Contribution margin contributes toward recovery of fixed cost and profit.…

Answered: You work for Zebra Holdings Plc as a…

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. Calculate the contribution of each product?

b. Use your findings from part (a) explain whether the company should stop making Laptop?

c. Use your findings from part (a) explain whether the company should stop making Ipad?

d. Do you agree that profitability will improve by ceasing to make Products laptop and Ipad? What do you suggest the company does to increase profitability?

You work for Zebra Holdings Plc as a junior management accountant.
The board of directors are considering ways to improve the suboptimal performance of an
investment in a manufacturing company called ZA products Ltd.
From the table below the Board of Directors are considering halting the production of 2 of their
products that appear to be making no profit.
You spot that marginal costing would show the results differently and may affect the directors'
decision.
Sales
Cost of sale
Profit /(Loss)
Material
Labour
Overheads
Laptop Total
(£m)
(£m)
15,623.00 8,543.00 9,849.00 34,015.00
Computer
(£m)
Ipad
(£m)
-4,876.00 -4,344.00
-5,125.20 -4,815.60
-2,234.00 -2,234.00
3,387.80 -2,850.60
3,254.00 12,474.00
5,216.40 15,157.20
-6,702.00
2,234.00
-855.40
-318.20

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