Question: Alpha QUESTION TWO ABG Ltd manufactures three products, Alpha Beta and Gamma, all of which are made from one basic raw material. Forecast costs and

 Alpha QUESTION TWO ABG Ltd manufactures three products, Alpha Beta and

Gamma, all of which are made from one basic raw material. Forecast

Alpha QUESTION TWO ABG Ltd manufactures three products, Alpha Beta and Gamma, all of which are made from one basic raw material. Forecast costs and selling prices are as follows. Product Beta Gamma Sales per month (units) 9 000 12 000 7 000 $ Selling price per unit 72 74 58 Variable costs per unit: Direct material 18 25 16 Direct labour 19 13 Variable overheads 14 13 12 The total fixed costs are $250 000 each month. $ $ 14 REQUIRED (a) Calculate the contribution per unit for each product. (6) Calculate the total monthly profit which can be achieved. Due to a material shortage, ABG Ltd will only receive 80% of its material requirement for the month of April 2019. No other shortages are expected. () Using the quantity of material that is available, prepare a statement to show the maximum profit that could be achieved for the three months ended 30 April 2019. (d) ABG Ltd has received an enquiry for an additional order of 4000 units of Gamma at a special price of $50 per unit. Additional fixed costs of $25 000 would be incurred. Assuming no material shortage, calculate the profit or loss on this order. Answer Part (d) only

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!