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Question No. 4 AC Products itd. manufactures a single product (Product \( x \) ) and selling price per unit is Rs.750. The manufacturing cost per unit is given below: Cost Per Unit Direct Material A \( \rightarrow 250 \mathrm{~g} \). Rs. 1,000 per kg Direct Materiai B \( \quad 750 \mathrm{~g} \) ? Rs. \( 400 / \)-per kg Direct Material C - 01 unit e Rs. \( 25 / \) - per unit Skitled Labour . 5 minutes (a) Rs.240/- per hour Unskilled Labour - 10 minutes As. \( 150 / \) - per hour Variable Overheads - Rs.30/- Total Fixed Overheads for a month is Rs. \( 2,880,000 \) and are absorbed based on machine utilization. 5 AC Products Ltd, has received an order from a new customer to supply 4000 . units of product \( \times \) at As. 600 each before end of the current month and the following additional information is given: 1. Material A will have an excess stock of \( 1,500 \mathrm{~kg} \) of material which will expire by end of the current month 2. Available stock of direct material B is just sufficient for the planned production and the next consignment from the usual supplier is due only on the glst day of the next month. If the new customer's order is accepted direct material B will have to be purchased at Rs 500 per kg . 3. Skilled labour is sufficient only to meet the current production level and overtime premium of Rs. 120 per hour has to be paid for any additional time. Assess whether the order of the new customer should be accepted.

          Question No. 4
AC Products itd. manufactures a single product (Product \( x \) ) and selling price per unit is Rs.750. The manufacturing cost per unit is given below:
Cost Per Unit
Direct Material A \( \rightarrow 250 \mathrm{~g} \). Rs. 1,000 per kg
Direct Materiai B \( \quad 750 \mathrm{~g} \) ? Rs. \( 400 / \)-per kg
Direct Material C - 01 unit e Rs. \( 25 / \) - per unit
Skitled Labour . 5 minutes (a) Rs.240/- per hour
Unskilled Labour - 10 minutes As. \( 150 / \) - per hour
Variable Overheads - Rs.30/-

Total Fixed Overheads for a month is Rs. \( 2,880,000 \) and are absorbed based on machine utilization.
5
AC Products Ltd, has received an order from a new customer to supply 4000 . units of product \( \times \) at As. 600 each before end of the current month and the following additional information is given:
1. Material A will have an excess stock of \( 1,500 \mathrm{~kg} \) of material which will expire by end of the current month
2. Available stock of direct material B is just sufficient for the planned production and the next consignment from the usual supplier is due only on the glst day of the next month. If the new customer's order is accepted direct material B will have to be purchased at Rs 500 per kg .
3. Skilled labour is sufficient only to meet the current production level and overtime premium of Rs. 120 per hour has to be paid for any additional time.

Assess whether the order of the new customer should be accepted.

Question No. 4
AC Products itd. manufactures a single product (Product x ) and selling price per unit is Rs.750. The manufacturing cost per unit is given below:
Cost Per Unit
Direct Material A → 250 g. Rs. 1,000 per kg
Direct Materiai B 750 g ? Rs. 400 /-per kg
Direct Material C - 01 unit e Rs. 25 / - per unit
Skitled Labour . 5 minutes (a) Rs.240/- per hour
Unskilled Labour - 10 minutes As. 150 / - per hour
Variable Overheads - Rs.30/-

Total Fixed Overheads for a month is Rs. 2,880,000 and are absorbed based on machine utilization.
5
AC Products Ltd, has received an order from a new customer to supply 4000 . units of product × at As. 600 each before end of the current month and the following additional information is given:
1. Material A will have an excess stock of 1,500 kg of material which will expire by end of the current month
2. Available stock of direct material B is just sufficient for the planned production and the next consignment from the usual supplier is due only on the glst day of the next month. If the new customer's order is accepted direct material B will have to be purchased at Rs 500 per kg .
3. Skilled labour is sufficient only to meet the current production level and overtime premium of Rs. 120 per hour has to be paid for any additional time.

Assess whether the order of the new customer should be accepted.

Added by Steven H.

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