a produce products x y z sold to uk, china and japan. recently, a company aware of a supplier of these products in india, they are considering manufacture all the products themselves, or buy in some, or all of them, from the supplier. the projected sales and cost information are shown below: product x y z sales volume 500 600 650 sales price per unit (£) 75 80 82 material a kg per unit 4 2 3 material a price (£) 5 5 5 material b kg per unit 5 3 4 material b price (£) 4 4 4 labour hours 3 5 5 labour rate (£) 6 6 6 variable overhead per unit (£) 7 6 5 direct expenses (£) 750 880 680 supplier price per unit (£) 70 65 62 total fixed overheads for the business £15000 required: (a) calculate the current total budgeted profit for the business, showing clearly the total variable cost, total marginal cost, total contribution, current variable cost per unit and the current marginal cost per unit for each product. state your advice to the management of a company as to whether they should make or buy each product under the current cost structure. (b) if the volume of material purchases falls below a certain level, price of materials will increase, as follows: if quantity of material a falls below 4000 kg: 5% increase in price if quantity of material b falls below 5000 kg: 2% increase in price recalculate the total budgeted profit for the business under the make or buy recommendation you gave in part (a), amending the material costs where necessary. (c) the management are considering an alternative option, lowering the sales price for all customers and increasing the volume of sales: x y z sales volume split: internal 120 150 180 sales volume split: china 180 200 280 sales volume split: japan 200 250 190 500 600 650 volume increase %: internal 0% 0% 0% volume increase %: china 10% 10% 10% volume increase %: japan 12% 12% 12% price fall: internal 0% 0% 0% price fall: china 5% 5% 5% price fall: japan 3% 3% 3% (i) calculate the revised sales volume and revenu
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Business, 22.06.2019 10:20
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a produce products x y z sold to uk, china and japan. recently, a company aware of a supplier of the...
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