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Solve all question A and B : Amarai Company Lad manulactures...

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Accounting

Solve all question A and B :
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Amarai Company Lad manulactures two bypes of Sprizzer - Classic and Luxury. Each product recuires the incorporafion of a difficultho-handle special part (one of them for a Classic and four for a Lumry). Both of these products are made in batches (large batches for Classic and smalt ones for Luxry). Each new batch mopires that the production facilies are 'set up'. Detals of the two products are: In recent months, Amarai Company Lta has been trying to persuade customers who buy the Classic to purchase the Luxury instead. An analysis of ovechead costs for Amarai Company Lid has provided the following infomation: Fapt 1 at Required: (a) Calculate the proft per unit and the retum on sales for Standard and Liaxury Sprizzens using (i) the trastional direct tabour-hour based absorption of oventeads. (ii) activity based costing methods. (b) Comment on the managerial implications for Amara Company Lid of the results in (a) above

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