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Question - IKS has a production capacity of 5,000 hours that can be used to produce products A or B. The following data is available:
Product A
Product B
Unit selling price
27$
30$
Unit raw material
9$
7$
Unit direct (variable) labour
5$
Indirect unit variable manufacturing costs
3$
6.50$
Unit fixed manufacturing indirect costs
Production time
2 hours
0.5 hours
Required - If the company chooses to manufacture only A, what is the margin on total variable cost of product A taking into account the constraint (5,000 hours)?
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