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# Freeze Ltd. manufactures standard fridges and freezers and the per unit information is below:…

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Freeze Ltd. manufactures standard fridges and freezers and the per unit information is below: Standard Fridge Standard Freezer Selling price \$1,500 \$1,000 Direct materials \$250 \$200 Direct labour (\$35 per direct labour hour \$140 \$105 Variable manufacturing overhead \$110 \$95 Fixed manufacturing overhead \$80 \$60 Required: 1. Freeze Ltd. received an inquiry from JB who has offered to purchase 10,000 units of standard freezers at \$950 per unit. If Freeze Ltd. accepts this order, it will need to spend an additional \$50 per unit due to additional specification requested by JB. Freeze Ltd. is already operating at maximum capacity whereby it produces 20,000 units of the standard freezer to meet existing customers demands. Should Freeze Ltd. accept the special order? Explain by showing detailed calculations. 2. Freeze Ltd. can sell the standard fridge for \$2,000 per unit if it spends another \$400 per unit for upgraded functions. If there is spare capacity, should Freeze Ltd. process the standard fridge further? Explain by showing your calculations. 3. Due to COVID-19 restrictions, Freeze Ltd. is experiencing reductions in skilled labourers and now has a maximum of 100,000 direct labour hours available for the period. According to Freeze Ltd. ‘s accountant Mrs Cold, the market demand for standard fridges will be 20.000 units and standard freezers will be 8,000 units in the coming year. How many standard fridges and freezers should Freeze Ltd. produce next year to achieve optimal production mix? Please show detailed calculations and round amounts to the nearest whole number.