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Question :
(a) A company manufactures and sells two products A and B. Presently, it sells 600 units of A and 400 units of B at a price of £24 and £19 respectively. The unit cost structure of both A and B is :
Total Factory overheads are absorbed on the basis of machine hours, which is the limiting factor. The machine hour rate is £2 per hour.
The company received an offer to sell product A at a price of £17.50 and product B at a price of £15.50. The company has a spare capacity of 25% and can supply either A or B. Calculate the overall profit if the offer is accepted.
(b) Explain the importance of Margin of Safety.
A company manufactures a one product. Estimated cost data regarding this product and other information for the product and the company are as follows: Sales price per unit Rs.2000
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Ask question #Miwhy is the activity based costing unaccepable for external financial reportnimum 100 words accepted#
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