Accounting fundamental - relevant cost analysis exercise

A factory has 4 work centres

WC A: 160 units/ hour , followed by
WC B: 135 units/ hour, followed by
WC C: 80 units/ hour, followed by
WC D: 189 units/ hour.


--> WC A--> WC B--> WC C--> WC C-->


Product selling price is $100 per unit
Variable cost per unit is $60 per unit (mainly direct material cost)
Monthly period cost is $1,000 per month.
Total Assets employed is $20,000.



a. What is the overall output rate of the whole system?
b. What is the monthly rate of return of the whole system?


Questions
1. Spend $400 to improve output rate per month of WC A to 200 units/ hour
2. Spend $600 to improve output rate per month of WC B to 150 units/ hour
3. Spend additional cost of $10 per unit to outsourcing processing of work of WC C to vendor ABC for processing 40 units.
4. Spend $100 to improve output rate of WC C to 110 units/ hour
5. Work centre C spoilt 4 units in production, what is the total loss to the factory?
6. Work centre A spoilt 3 units in production, what is the total loss to the factory?

Accept the suggestions or not?

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