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Question 4 (10 marks) ABC Ltd has provided the...

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Accounting

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Question 4 (10 marks) ABC Ltd has provided the following data relating to its two most popular models of an electronic product. Standard S/unit 70 15 10 30 Deluxe S/unit 120 Selling price Direct material Direct labour 30 60 24 000 Manufacturing overhead $30/machine hour Monthly demand (units) 40 000 The fixed manufacturing overhead component included in the above unit costs is $20 per machine hour On the very first day of June, a major piece of manufacturing equipment was damaged. It would take two weeks for replacement parts to arrive from Switzerland. Consequently, there would be only 60 000 machine hours available in June to manufacture the two models of the electronic product. Required (a) Given the limited machine hours available in June, conduct an appropriate financial analysis. (6 marks) (b) Based on the above financial analysis, determine how many units of each product should be produced in that month to maximise ABC Ltd's profitability. (4 marks)

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