Eating Excellence (Pty) Ltd. manufactures two different stainless steel kitchen apparatus, namely Mixer and Fixer. The...

 

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Eating Excellence (Pty) Ltd. manufactures two different stainless steel kitchen apparatus, namely Mixer and Fixer. The products are sold to retailers, who resell the products to their own customers. The management accountant is busy preparing the monthly budget for the next financial year. The company's metal-moulding machine's capacity is limited to 480 hours per month. All the other machines have unused capacity and the other resources are readily available. The sales manager has indicated that she can potentially sell 2 000 units of product Mixer (requiring 400 machine hours to produce) and 3 000 units of product Fixer (requiring 150 machine hours to produce) per month to a variety of customers. The budgeted information per unit for each product is as follows: Мixer Fixer Selling price 100 80 Raw material 20 20 Variable conversion costs 30 30 Fixed conversion costs(excl. depreciation) 15 Depreciation Absorption profit per unit 10 25 15 Required: 2.1. Determine the number of monthly sales units per product (sales mix) that should be budgeted for the coming financial year in order to maximise the profit. Then calculate the budgeted total monthly contribution that will be derived from this optimum mix. (14) Eating Excellence (Pty) Ltd. manufactures two different stainless steel kitchen apparatus, namely Mixer and Fixer. The products are sold to retailers, who resell the products to their own customers. The management accountant is busy preparing the monthly budget for the next financial year. The company's metal-moulding machine's capacity is limited to 480 hours per month. All the other machines have unused capacity and the other resources are readily available. The sales manager has indicated that she can potentially sell 2 000 units of product Mixer (requiring 400 machine hours to produce) and 3 000 units of product Fixer (requiring 150 machine hours to produce) per month to a variety of customers. The budgeted information per unit for each product is as follows: Мixer Fixer Selling price 100 80 Raw material 20 20 Variable conversion costs 30 30 Fixed conversion costs(excl. depreciation) 15 Depreciation Absorption profit per unit 10 25 15 Required: 2.1. Determine the number of monthly sales units per product (sales mix) that should be budgeted for the coming financial year in order to maximise the profit. Then calculate the budgeted total monthly contribution that will be derived from this optimum mix. (14)

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Mixer Fixer Estimated sell qty 2000 3000 Labou... View the full answer