Part 2 Aloe Medical Aids Company has 16000 machine hours available to use to

(Part 2)Aloe Medical Aids Company has 16,000 machine hours available to use to produce either Bandages orBraces. The cost accounting department developed the following unit information for each of the products:BandagesBracesSales priceRM114RM142 16

Direct materials 38 42 Direct labor 30 28 Variable manufacturing overhead 16 24 Fixed manufacturing overhead 6 12 Machine hours required 0.6 1.2 Management desires to make a decision regarding which product to produce in order to maximise the company's income. Required: Taking into consideration the constraint under which the company operates, prepare a report to show which product should be produced and sold. Show your calculation. BANDAGES BRACES Cost of production per unit are: Direct Material RM38.00 RM42.00 Direct Labour RM30.00 RM28.00 Variable Manufacturing Overhead RM16.00 RM24.00 Total Variable Cost RM84.00 RM94.00 (+) Fixed Manufacturing Overhead RM6.00 RM12.00 Total Production cost per unit RM90.00 RM106.00 Number of units produced: BANDAGES BRACES Machine Hours Available 16,000 16,000 Machine Hours Required 0.6 1.2 =26,667 units = 13,333 units Sales Price per unit RM114.00 RM142.00 (-) Production cost per unit RM90.00 RM106.00 Net Profit per unit RM 24.00 RM 36.00 Net Profit per product RM24.00 RM36.00 (X) 26,667 units (X) 13,333 units RM640,008.00 RM479,988.00 Looking at the above calculation, Aloe Medical Aids Should Produce and sell Bandages in order to maximize the company’s income. QUESTION 4: OBJECTIVE 17

REQUIREMENTFinancial Statement AnalysisRefer to the following financial statements of Kantan Sdn. Bhd. for 2019 and 2018: Kantan Sdn Bhd Balance Sheets December 31 (in millions) 2019 2018 Assets Current assets Cash Acount receivable (net) Inventories Other current assets Total current assets Property (net) Other assets Total assets RM460 1,188 1,132 247 3,027 3,281 5,593 RM11,901 RM444 1,190 1,056 225 2,915 3,128 5,804 RM11,847 Liabilities and Stockholders’ Equity Current liabilities Long-term liabilities Stockholders’ equity – common Total liabilities and stockholders’ equity RM3,313 6,826 1,762 RM11,901 RM3,184 6,509 2,154 RM11,847 Kantan Sdn Bhd Income Statements For the year ended December 31 (in millions) 2019 2018 18

Net salesCost of goods soldGross profitSelling and administrative expensesIncome from operationsRM13,1987,7505,4483,4721,976RM12,3977,1085,2893,2991,990Interest expenseOther (income) expense, netIncome before income taxesIncome tax expenseNet income233111,7325031,22924801,7425021,240Required:a.Analyze Kantan’s financial statement. Computethe following ratios for 2019:i.Current ratio (year 2018 – 0.92:1)