in thousand pounds

1.a W DT C Total
No. of units sold 200 160 200
Revenue 340 200 300 840
Variable costs:
Mat 100 96 90 286
Lab 63 48 53 164
Var OH 17 16 15 48
S&D 7 5.6 7 19.6
Total Var. Cost 187 165.6 165 517.6

Contribution 153 34.4 135 322.4

Contribution/Unit 765 215 675

WS OH 198
Dist. OH 60.4
Total Fixed OH 258.4

Profit 64

1.b
Revised Cont. 288
F OH 258.4

Revised Profit 29.6

1.c
Qualitative aspect which you have to discuss

1.d Marginal cost per Mirror = 120+40+20 = 180

Contract price =200
Savings = 20
For 160 Mirrors, savings would be = 3200
So, Contribution will be = 37.6

2
Offer rate of American Company = 1050
Less: Var. cost per Chest 790
Contribution per Chest 260
Less: Dist. OH 18

Profit 242

For 50 Chests 12100

Workings:
For chest
Variable costs:
Mat 90000
Lab 53000
Var OH 15000
for 200 chests 158000

Var cost per unit = 790