Question 2 Tan runs a shop called 'All Juice Station' which produces 3,500 bottles of fresh apple juice every day to meet his regular customer's demands. The production capacity is 5,000 bottles a month. The cost of making a bottle of fresh apple juice is RM2.75, which goes into material and labour. Manufacturing overheads are fixed at RM1,500 per day. Nina, who owns a restaurant, has made a special offer of buying RM1.60 per bottle from him and selling it under a generic name, 'Nina's Juice'. Nina wants to order 1,000 bottles each month. Advise Tan whether he should accept this special order.

Question 2 Tan runs a shop called 'All Juice Station' which produces 3,500 bottles of fresh apple juice every day to meet his regular customer's demands. The production capacity is 5,000 bottles a month. The cost of making a bottle of fresh apple juice is RM2.75, which goes into material and labour. Manufacturing overheads are fixed at RM1,500 per day. Nina, who owns a restaurant, has made a special offer of buying RM1.60 per bottle from him and selling it under a generic name, 'Nina's Juice'. Nina wants to order 1,000 bottles each month. Advise Tan whether he should accept this special order.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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