80.2K
Verified Solution
Link Copied!
Zayn.Co. manufacture 3 products for which details are as follows:
| | A | B | C |
| Selling price | $25 | $20 | $15 |
| Materials | 7 | 6 | 5 |
| Labor (@ 75c per hr.) | 9 | 6 | 3 |
| Variable overheads Total direct cost | 3 $19 | 3 $15 | 3 $11 |
Sales demand for the period is limited as follows:
Product A 4,000 units
Product B 6,000 units
Product C 6,000 units
The supply of labor is limited to 90,000 hours per period.
1) Calculate contribution per unit for X Ltd. Manufacture.
2) Calculate contribution per labor hours per unit.
3) Rank the products in relation to labor hour rate.
4) Draw up a production schedule showing how X Ltd. Manufacture would maximize profit in spite of the constraint.
(Please explain each step in layman terms)
Answer & Explanation
Solved by verified expert
