C - Question 31 This question contains 10 Marks The following scenario relates to three requirements Scrum Ltd produces two products, the Webb and the Ellis. Budgeted data relating to these products on a per unit basis for August 20X6 are as follows: Webb Ellis Selling Price $150 $100 Materials $80 $30 Salesmen's commission $30 $20 Each unit of product incurs costs of machining and assembly. The total capacity available in August 20X6 is budgeted to be 700 hours of machining and 1,000 hours of assembly, the cost of this capacity being fixed at $7,000 and $10,000 respectively for the month, whatever the level of usage made of it. The number of hours required in each of these departments to complete one unit of output is as follows: Webb Ellis Machining 1 hour 2 hours Assembly 2.5 hours 2 hours In the market Scrum Ltd operates in, selling prices are fixed by European Union directives. The permitted output of either product in August is 400 units (i.e. Scrum Ltd may produce a maximum of 800 units of product) At the present controlled selling prices, the demand for the products exceeds this considerably