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QUESTION 3 Dagbreek CC produces three products: A,B and C. The following table gives detail of the cost per unit for each of the three products 4 Direct Material Direct Labour Variable Manufacturing Overheads3 Total Contribution per Unit Selling Price per Unit 27.00 12.00 3.00 42.00 18.00 60.00 14.00 40.00 32.00 16.00 8.00 4.00 54.00 60.00 36.00 20.00 90.00 80.00 10 The direct labour rate is R 8 per hour and only 3,000 labour hours per week are available. The marketing division feels that the maximum sales in units per week are 12 13 14 15 16 17 18 19 20 21 22 a 23 b 24 c 1,000 units 2,000 units 400 units Fixed manufacturing overheads amount to R 20,000 per week Required Management wants to know which product should be produced to ensure maximum profit Management also wants to know the amount of such profits You have a meeting with the CEO of Dagbreek. Explain to him the difference between absorption costing & variable costing

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