Oulouto Limited (OL) is engaged in the manufacture and sale of three products viz. WBA, QPR and
Question:
Oulouto Limited (OL) is engaged in the manufacture and sale of three products viz. WBA, QPR and SC. The following information is available from OL's records for the month of February 20x9:
WBA QPR SC
Sales price per unit (GHS) 2,300 1,550 2,000
Materials cost per Kg. (GHS) 250 250 250
Labor time per unit (Minutes) 20 30 45
Machine time per unit (Hours) 4 2.5 3
Net weight per unit of finished product (Kg.) 6 4 5
Yield (%) 90 95 92
Estimated demand (units)
Each worker is paid monthly wages of GHS15,000 and works a total of 20 hours per month. m OL's total overheads are estimated at 20% of the material cost.
Fixed overheads are estimated at GHS5 million per month and are allocated to each product on the basis of machine hours. 100,000 machine hours are estimated to be available in February 20X9.
Required:
Based on optimum product mix, compute OL's net profit for the month February 20X9
Financial Accounting
ISBN: 978-1259222139
9th edition
Authors: Robert Libby, Patricia Libby, Frank Hodge