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Determine total contribution margin of soraya jewellery

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Reference no: EM133036455

Question - Soraya Jewellery assembles pearls and crystals to make brooch sets for festive seasons throughout the year. There are three types of brooch sets, Diamond, Platinum and Silver. The owner of the business, Soraya gets her regular supply from a Korean dealer but recently, due to the outbreak of Covid-19, all supplies from Korea have been halted. Fortunately, Soraya has some spare pearls and crystals, that she thinks enough to last for the next six months. There are 74,700 units of pearls in stock. The following is the information related to the products.

 

Diamond RM

Platinum RM

Silver RM

Selling price per set

155.00

175.00

115.00

Variable costs per set

43.00

52.00

66.00

Usage of pearls per set

56 units

75 units

45 units

Demand (sets for 6 months)

450 sets

600 sets

540 sets

Required -

a. Advise Soraya on which brooch set should be produced first, second and third in terms of contributing profits.

b. Determine total contribution margin of Soraya Jewellery for the next six months.

Reference no: EM133036455

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