QUESTION $2$

The product design and development team at CGH Manufacturing Enterprises has completed the development of a

prototype of a product to be manufactured during the forthcoming quarter. The prototype passed through the three

production departments $-A,B,$ and $C.$ The following budgeted information on the prototype is available:

The following information relates to the prototype:

Direct labour recorded against the prototype:

A special machine was hired for the production of the prototype at a cost of R$590\mathrm{.}00.$

Machine hours recorded against the prototype:

Price quoted for the prototype, including delivery R$172000.$

CGH Manufacturing Enterprises absorbs non$-$production overhead using the following pre$-$determined overhead

absorption rates:

REQUIRED:

The product design and development team is convinced that the manufacturing and non$-$manufacturing costs of the

prototype are unlikely to be significantly different from those of the product. Therefore, present an analysis of the total cost

and profit or loss attributable to a unit of the product.

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