4 Sazali is a newly appointed cost trainee for a rattan furniture maker, Zen-Rotan, whichmanufactures various designs and sizes of furniture in sets and individual items. All these years,the company has always adopted a simple approach of pricing and gives discounts whencustomers negotiate the price. Sazali feels that a high turnover is important for improvedprofitability of the business. There are three types of furniture which Zen-Rotan produces,Type A, Type B and Type C. The following is June 2017's monthly information for each unit ofdifferent type of furniture.Турe AТуpе BТуре CMaterials consumption in kg507090Direct labour in hours243040Manufacturing overheadsRM45RM50RM65Other overheadsRM35RM25RM45Demand for the month (sets)200400120Materials are charged at RM20 per kg and the direct labour at RM25 per hour; a high rateconsidering skilled labour is employed. It is that time of the year where the festive season isjust round the corner, so orders are on the rise. Sazali is confident that the production capacityis capable of meeting the demand.Required:a. Advise Sazali as to which pricing method is appropriate for the three types of furniture.b. Having made the choice of pricing method in (a), calculate the selling price and show thestatement of profit and loss for one month.C. Discuss briefly other factors that might influence the pricing of Sazali's furniture.

Name: 4 Sazali is a newly appointed cost trainee for a rattan furniture mak
Uploaded: 2024-03-20T06:32:49.000Z
Channel: Bartleby
Description: 4 Sazali is a newly appointed cost trainee for a rattan furniture maker, Zen-Rotan, whichmanufactures various designs and sizes of furniture in sets and individual items. All these years,the company has always adopted a simple approach of pricing an