Question: John is a cabinet maker and makes dining room and lounge chairs. The annual total fixed cost amounts to R800,000. John is experiencing a shortage

    • John is a cabinet maker and makes dining room and lounge chairs. The annual total fixed cost amounts to R800,000. John is experiencing a shortage of labour hours due to a strike organised by the labour union. Current production and sales are 5 000 of each of the products. The following information is available: Dining room chair Lounge chair Selling price R600.00 R790.00 Material used 0.85 kg 0.80 kg Material price per kg R290.00 R305.00 Labour hours 0.54 1.45 Labour rate per hour R90.00 R110.00 Variable manufacturing overheads R50.00 R50.00 Required: Calculate the contribution per product and contribution per limiting factor.



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