PDR plc manufactures four products using the same machinery. The following details relate to its products:

(a) Determine the production plan which will maximize the weekly profit of PDR plc and prepare a profit statement showing the profit your plan will yield. (10 marks)
(b) The marketing director of PDR plc is concerned at the company's inability to meet the quantity demanded by its customers.
Two alternative strategies are being considered to overcome this:
(i) To increase the number of hours worked using the existing machinery by working overtime. Such overtime would be paid at a premium of 50 per cent above normal labour rates, and variable overhead costs would be expected to increase in proportion to labour costs.
(ii) To buy product B from an overseas supplier at a cost of £19 per unit including carriage. This would need to be repackaged at a cost of £1 per unit before it could be sold.
Requirement:
Evaluate each of the two alternative strategies and, as management accountant, prepare a report to the marketing director, stating your reasons (quantitative and qualitative) as to which, if either, should be adopted.

Product A Product B Product C Product D f per unit per unit per unit f per unit Selling price Direct material Direct labour Variable overhead Fixed overhead 28 45 4 4 8 8 8 8 0.25 Labour hours Machine hours 0.25 4 Units 0.50 4 Units 0.50 Units Units Maximum demand per week Fixed costs are 8 000 per week 250 100