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PQR Ltd is an engineering company engaged in the manufacture of three products -X, Y...

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Accounting

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PQR Ltd is an engineering company engaged in the manufacture of three products -X, Y and Z all of which use the same machine which is available for 77000 hours p.a. The standard costs of the product per unit are: X Y 140 96 72 Direct material Direct labour (16 per machine hour) Variable overhead Total cost Selling price per unit Maximum demand (units) 80 64 80 224 316 5,000 Z 160 112 84 356 448 10,000 308 400 6,000 Fixed cost per annum 350000. The company could buy in similar quality products at the following unit prices: X350; Y - 280; 2 - 3400. You are required to (1) recommend which product(s) and how much the company should buy and (ii) calculate the profit of the company based on your recommendation

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