Donaldson Ltd manufactures only two products, Alto and Bass. 

At present, the factory has one machine which is operating at 100 per cent capacity. Only 520,000 labour hours are available in the year. 

The cost per unit is: 

The selling prices for one unit of Alto and Bass are $390 and $350 respectively. Maximum sales in units for the year are as follows. 

Required

a. Calculate the contribution per unit for each product. 

b. Calculate the contribution per labour hour per unit for each product. 

c. State the optimum production plan that Donaldson Ltd could introduce which would maximise profit.

Transcribed Image Text:

Alto Bass Direct materials 10 metres at 20 metres at $5 per metre $5 per metre Direct labour 44 hours at 32 hours at $5 per hour $5 per hour