Selling price per unit Total Variable costs per unit Monthly maximum demand (units) Number of labour...

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Selling price per unit Total Variable costs per unit Monthly maximum demand (units) Number of labour hours used per unit Fixed Costs (Total) Alpha 50 (28) 700 2 Beta 55 (28) 600 3 20,000 Gamma 48 (24) 800 Required: a) Prepare a marginal cost profit statement to show the overall profit if the company were able to meet the maximum demand for all products. b) If production were limited to 1,800 units in total what would be the most profitable mix of products? What is the profit? c) If capacity was not a problem and the company could meet the maximum demand for each product, however the availability of skilled labour was limited to 5,000 hours, what would be the best mix of production to maximise profits? What is the profit? What do you suggest to Travelmaster Ltd to overcome this limitation? Selling price Variable costs Contribution per unit Quantity produced /sold Contribution per unit: Order of production Production mix Alpha 50 (28) Contribution Less Fixed Costs Net Profit ----- 22 700 Profit Statement: Sales Variable cost Contribution Fixed Costs Net Profit Limited Production (1,800 units) Alpha 22 3rd 400 Beta 55 (28) Alpha 8,800 ===== 27 ALPHA BETA 35,000 33,000 (19,600) (16,800) 15,400 16,200 600 Beta 27 1st 600 Beta 16,200 Gamma 48 (24) 24 800 GAMMA 38,400 (19,200) 19,200 Gamma 24 2nd 800 Gamma 19,200 Total 2,100 TOTAL 106,400 (55,600) 50,800 (20,000) 30,800 1,800 Total 44,200 (20,000) 24,200 Selling price per unit Total Variable costs per unit Monthly maximum demand (units) Number of labour hours used per unit Fixed Costs (Total) Alpha 50 (28) 700 2 Beta 55 (28) 600 3 20,000 Gamma 48 (24) 800 Required: a) Prepare a marginal cost profit statement to show the overall profit if the company were able to meet the maximum demand for all products. b) If production were limited to 1,800 units in total what would be the most profitable mix of products? What is the profit? c) If capacity was not a problem and the company could meet the maximum demand for each product, however the availability of skilled labour was limited to 5,000 hours, what would be the best mix of production to maximise profits? What is the profit? What do you suggest to Travelmaster Ltd to overcome this limitation? Selling price Variable costs Contribution per unit Quantity produced /sold Contribution per unit: Order of production Production mix Alpha 50 (28) Contribution Less Fixed Costs Net Profit ----- 22 700 Profit Statement: Sales Variable cost Contribution Fixed Costs Net Profit Limited Production (1,800 units) Alpha 22 3rd 400 Beta 55 (28) Alpha 8,800 ===== 27 ALPHA BETA 35,000 33,000 (19,600) (16,800) 15,400 16,200 600 Beta 27 1st 600 Beta 16,200 Gamma 48 (24) 24 800 GAMMA 38,400 (19,200) 19,200 Gamma 24 2nd 800 Gamma 19,200 Total 2,100 TOTAL 106,400 (55,600) 50,800 (20,000) 30,800 1,800 Total 44,200 (20,000) 24,200

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a Marginal Cost Profit Statement Product Alpha Beta Gamma Total Selling price per unit 50 55 48 Vari... View the full answer