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GuESTION $2$

The procuct design and developmert leam at CGH Manufacting Entarprises has corpleted the developmert of a protetype of a product io be manufacared durng the forthcoming quarter. The protolype passed through the trot producion departenents $-A,B$ and $C.$ The following buigeted iflormation on the prolotype is available:

The following intormation reiates io the probotype:

$\backslash$table$[[$Direct makeral requisfioned,R$97$ A$70\mathrm{.}43],[$Direct materal retumed to store,R$1396,00]]$

Dired labour recorded against the prototype:

$\backslash$table$[[$Production depirtment A$,146$ hours at $R48$ D$0$ per hour$],[$Procuction department,$39$ hours at $85700$ per hour$],[$Production department C$,279$ hours at Robi. of per hour$]]$

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

Machine hours recorded against the protolype:

$\backslash$table$[[$Producton department A$,411$ hours$],[$Production department B$,657$ hours$],[$Production department C$,502$ hours$]]$

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

CGH Manufacturing Enlerprises absorts non$-$production overhead using the following pre$-$determined overhead absorption rates:

$\backslash$table$[[$Administration and general overtead,$10\%$ of production costs$],[$Seling and distribution overhead,$12\%$ of seling price$]]$

REQUIRED:

The product design and development team is convinced that the manulacturing and non$-$manufacturing costs of the prototype are unikely io be sigrificantly different from those of the product. Therefore, present an analysis of the lotal cost and profit or loss attributable to a unit of the product.

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