Question: please answer the QUESTION Big Brothers Ltd has provided the following data relating to its two most popular models of an electronic product. Standard Deluxe
please answer the QUESTION

Big Brothers Ltd has provided the following data relating to its two most popular models of an electronic product. Standard Deluxe $/unit S/unit Selling price 60 100 Direct material 10 20 Direct labour 15 25 Manufacturing overhead @ $30/machine hour 45 60 Monthly demand (units) 20 000 15 000 The fixed manufacturing overhead component included in the above unit costs is $20 per machine hour. On the very first day of June, a major piece of manufacturing equipment was damaged. It would take two weeks for replacement parts to arrive from Germany. Consequently, there would be only 50 000 machine hours available in June to manufacture the two models of the electronic product. Required: (a) Given the limited machine hours available in June, present a comparative financial analysis. (8 marks) (b) Based on the above financial analysis, determine how many units of each product should be produced in that month to maximise Big Brothers Ltd's profitability. (6 marks)
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
