Cambran Ltd, manufactures a number of different producto and has recently employed Kath Houghton as its...

 

  

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Cambran Ltd, manufactures a number of different producto and has recently employed Kath Houghton as its management accountant. Kath is currently looking at the various products and processes within Cambran Ltd. to increase profitability, as a measure to try to avoid redundancies. Kath has identified 4 areas of that she would like to look at first and she has asked you to provide her with the following information. a. Cambran Ltd. manufactures 3 components Alpha, Bravo and Charlie, on its new machine which has 60,000 hours available, with the 3 components being used to produce Crimp which is a relatively new product and Cambran Ltd. are trying to grow their market share. Cambran Ltd. has orders for 6,000 units of each component, from relatively established customers and Kath is determined not to let these customers down. Components from other producers can be sourced and Cambran Ltd. are satisfied with the quality of these replacements and confident that they can buy them in if necessary. The following information has been produced: Each unit takes the following machine hours to make one unit of each component: Alpha: 3 hours Bravo: 5 hours Charlie: 6 hours The variable cost per unit of component is: Alpha: £50 Bravo: £55 Charlie: £52 The buy in purchase cost of each component is: Alpha: £56 Bravo: £60 Charlie: £70 In order to maximise their profits how many units of each component should the company produce or buy in? (7 marks) Cambran Ltd, manufactures a number of different producto and has recently employed Kath Houghton as its management accountant. Kath is currently looking at the various products and processes within Cambran Ltd. to increase profitability, as a measure to try to avoid redundancies. Kath has identified 4 areas of that she would like to look at first and she has asked you to provide her with the following information. a. Cambran Ltd. manufactures 3 components Alpha, Bravo and Charlie, on its new machine which has 60,000 hours available, with the 3 components being used to produce Crimp which is a relatively new product and Cambran Ltd. are trying to grow their market share. Cambran Ltd. has orders for 6,000 units of each component, from relatively established customers and Kath is determined not to let these customers down. Components from other producers can be sourced and Cambran Ltd. are satisfied with the quality of these replacements and confident that they can buy them in if necessary. The following information has been produced: Each unit takes the following machine hours to make one unit of each component: Alpha: 3 hours Bravo: 5 hours Charlie: 6 hours The variable cost per unit of component is: Alpha: £50 Bravo: £55 Charlie: £52 The buy in purchase cost of each component is: Alpha: £56 Bravo: £60 Charlie: £70 In order to maximise their profits how many units of each component should the company produce or buy in? (7 marks)

Answer rating: 100% (QA)

Alpha Bravo Charlie Total No of orders per each component a 6000 6000 6000 Hrs required to manufactu... View the full answer