Question: Think Big Ltd has received a special order for 2,000 units of its product X at a special price of $60. The product normally sells

 Think Big Ltd has received a special order for 2,000 units
of its product X at a special price of $60. The product
normally sells for $80 and has the following manufacturing costs: Direct materials

Think Big Ltd has received a special order for 2,000 units of its product X at a special price of $60. The product normally sells for $80 and has the following manufacturing costs: Direct materials Direct labour Variable manufacturing overhead Fixed manufacturing overhead Unit cost Per unit $24 16 12 20 $72 Currently the company has excess capacity to fill the order without harming normal production and sales. All fixed overhead is unavoidable. The production department is currently facing a constraint of resources on producing three products with a shortage of machine hours since one of its two machines is down-only 360 hours are available this month. The selling price, costs, labour requirements, and demand of the three products are as follows: Selling price Variable cost per unit Machine hours per unit Demand (units) Product A Product B Product $5.00 $3.00 $5.00 $3.50 $2.00 $2.00 0.75 0.25 300 400 210 Demand (units) 300 400 210 Q5-a For making a decision on acceptance of the special order: Calculate the effect on the company's short-term profit on accepting the order. Determine the minimum price (in total and per unit) to charge in order to achieve an incremental profit of $20,000. (ii) Assuming the company is currently operating at full capacity, what effect will the order have on the company's short-term profit? (8 marks) Unanswered Unanswered Save Q5-6-1 For making a decision on prioritization of products when the machine is down Determine the units of each products to be produced and sold to maximise profit. (9 Marks) o o 0 0 0 0 Unanswered a sve 05-b- () Calculate the total contribution margineamed based on your production plan determined in above. Marks)

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