Question

21. (a) What effect would accepting this order have on the companys net operating income if a special price of TZS 169,950/=
21. Bonjour Ltd Company (BLC) manufactures three basic products namely X,Y,andz with the following production and sales data
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Answer #1

Since materials are a constraint we solve based on Contirbution per kg:

A B C
Contribution Margin (A) ($) 32000 14000 21000
Meterials reqd. (B) 24000/3000 = 8 15000/3000 =5 9000/3000 = 3
Hence Contirbution per kg (A/B) 4000 2800 7000
Rank 2 3 1

Hence we produce in following order:

  1. Product C
  2. Product A
  3. Product B
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