Azure Ltd produces confectionery and is considering extending their product range to include biscuits, crackers and crisps. They could either buy in products made to their specification or manufacture the products in-house. If they manufacture them they would have to buy additional equipment for each product range. All manufactured products would be charged with 12% of sales revenue to cover the overheads of the business. Use the data in the table below to assess whether each product range should be bought in or manufactured in-house: Biscuits 1,100,000 1,500,000 Crisps 2,100,000 Crackers Sales demand per annum (in number of units) Sales price per 100 units Equipment cost Bought-in price per 100 units Raw materials per 100 units Variable labour costs per 100 units Distribution cost per 100 units Allocation of overhead – 12% of sales (per 100 units) £155 £220 £90 £260,000 £375,000 £130,000 £98 £170 £68 £32 £60 £25 £25 £60 £15 £15 £30 £11.75 £18.60 £26.40 £10.80

Azure Ltd produces confectionery and is considering extending their product range to include biscuits, crackers and crisps. They could either buy in products made to their specification or manufacture the products in-house. If they manufacture them they would have to buy additional equipment for each product range. All manufactured products would be charged with 12% of sales revenue to cover the overheads of the business. Use the data in the table below to assess whether each product range should be bought in or manufactured in-house: Biscuits 1,100,000 1,500,000 Crisps 2,100,000 Crackers Sales demand per annum (in number of units) Sales price per 100 units Equipment cost Bought-in price per 100 units Raw materials per 100 units Variable labour costs per 100 units Distribution cost per 100 units Allocation of overhead – 12% of sales (per 100 units) £155 £220 £90 £260,000 £375,000 £130,000 £98 £170 £68 £32 £60 £25 £25 £60 £15 £15 £30 £11.75 £18.60 £26.40 £10.80

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Description: Azure Ltd produces confectionery and is considering extending their product range to includebiscuits, crackers and crisps. They could either buy in products made to their specification ormanufacture the products in-house. If they manufacture them th

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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