1.7 Read the scenario below and answer the questions that follow
FANA MANUFACTURER (FM)
Fana Manufacturer produces ladies sandals and sells them to different retailers. The total
cost to produce 45 000 sandals is R180 0000. The management of VC wants to apply
Total Quality Management/TQM in order to improve the quality of their products.
(2)
1.7.1
Calculate the production cost per sandal.
1.7.2
(3)
Calculate how much profit Fana will receive if he all 45 000 sandals are sold. Show
all the calculations.
Use the table below as a guide to answer QUESTION 1.7
PRODUCTION COST PER SANDAL
PROFIT
1.7.3
(5)
Explain to the management of FM the meaning of TQM as part of quality
management system.
[40]
8

Special order carson manufacturing, inc., sells a single product for $36 per unit. at an operating level of 8,000 units, variable costs are $18 per unit and fixed costs $10 per unit. carson has been offered a price of $20 per unit on a special order of 2,000 units by big mart discount stores, which would use its own brand name on the item. if carson accepts the order, material cost will be $3 less per unit than for regular production. however, special stamping equipment costing $4,000 would be needed to process the order; the equipment would then be discarded. assuming that volume remains within the relevant range, prepare an analysis of differential revenue and costs to determine whether carson should accept the special order. use a negative sign with answer to only indicate an income loss from special order; otherwise do not use negative signs with your answers.