a) Prepare a detailed budget statement that shows the total contribution for each model.
b) Prepare a statement for the management of Hulme Ltd that details the maximum profit obtainable taking into account all of the current restrictions.
c) The management are reviewing their decision to continue to produce all four products. Discuss FOUR (4) limitations of manufacturing all four models in contrast to a reduction in product range.
d) The accountants for Hulme Ltd have used a traditional absorption costing method to absorb the overheads of each of the four products.
Advise the management on the methods the accountants may have used to absorb the overheads of the four models.
e) It has been suggested at a recent management meeting that an activity based costing approach could be superior to traditional absorption costing. Evaluate this view in a memo to the management of Hulme Ltd.