1. Cosmetics R Us performs three types of cosmetic surgery, face jobs, gut tucks and liposuction....

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1. Cosmetics R Us performs three types of cosmetic surgery, face jobs, gut tucks and liposuction. Estimated maximum demand for one year Average consultancy fee Surgeon cost per hour (paid £500 per hour) £1,500 Variable cost per operation £600 Required: i. FJ 10,000 ii. GT Fixed overhead is incurred at £750,000 a month. Unfortunately, due to limited supply of surgeons, Cosmetics R Us can only currently employ 20 consultants working a 42 week year, performing operations up to a maximum of 40 hours a week. iii. 2,000 LS 3,000 £3,000 £1,500 £2,000 £250 £750 £100 £300 Calculate the number of operations that Cosmetics R Us must perform each year for each type of surgery to maximize contribution? Calculate the annual profit Cosmetics R Us would earn. (6 marks) (3 marks) Because of intense competition, there is huge pressure on waiting lists for FJs and therefore Cosmetics R Us must fulfil all of these operations first (before undertaking any GT or LS operations), otherwise the reputation of the business could suffer. Required: Calculate the number of operations that Cosmetics R Us would perform annually for each type of surgery if this were the case? (3 marks) 1. Cosmetics R Us performs three types of cosmetic surgery, face jobs, gut tucks and liposuction. Estimated maximum demand for one year Average consultancy fee Surgeon cost per hour (paid £500 per hour) £1,500 Variable cost per operation £600 Required: i. FJ 10,000 ii. GT Fixed overhead is incurred at £750,000 a month. Unfortunately, due to limited supply of surgeons, Cosmetics R Us can only currently employ 20 consultants working a 42 week year, performing operations up to a maximum of 40 hours a week. iii. 2,000 LS 3,000 £3,000 £1,500 £2,000 £250 £750 £100 £300 Calculate the number of operations that Cosmetics R Us must perform each year for each type of surgery to maximize contribution? Calculate the annual profit Cosmetics R Us would earn. (6 marks) (3 marks) Because of intense competition, there is huge pressure on waiting lists for FJs and therefore Cosmetics R Us must fulfil all of these operations first (before undertaking any GT or LS operations), otherwise the reputation of the business could suffer. Required: Calculate the number of operations that Cosmetics R Us would perform annually for each type of surgery if this were the case? (3 marks)

Answer rating: 100% (QA)

To maximize contribution we need to calculate the contribution for each type of surgery Contribution is the difference between the revenue generated and the variable costs incurred I Calculate the num... View the full answer