Giga Ltd makes 3 products, GA1, GA2 and GA3. The following standard cost card applies to all of them.
|Cost per unit|
|Product GA||Product GA1||Product GA2|
|Variable selling expenses||7||8||9|
|Total cost per unit||62||65||83|
Historical data shows that every month, Giga Ltd sells 300 units in equal portions between the 3 products to the general public. At the beginning of 2021, Giga Ltd entered into an agreement with GD Ltd to supply them with 500 units of each product every month.
Due to strikes over the past months, the company found itself with a shortage of labor and currently does not have enough people to exceed 10,510 labor hours per month. Giga Ltd pays for Labor at a rate of N$4 per hour and fixed overheads are absorbed by direct labor hours.
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