Practice Question - Relevant Information Analysis 1) Explain the term limiting factor in a production strategy and give some examples 2) ABC Ltd produces 4 products and is planning its production mix for the next period. Estimated cost, sales and production data are shown below: A B D Selling price/unit () Materials @ 4/kg Direct labour a 2/hr Maximum demand (units) 50 12 6 3.000 70 36 4 3,000 80 20 14 3,000 100 24 10 3,000 Required: What is the optimal production mix under the following assumptions? a) Assuming labour hours is a limiting factor in the period, and labour hours is limited to 45,000 hours. b) Assuming, materials is a limiting factor in the period and materials is limited to 55,000 kgs in the period. c) Calculate the total contribution margin given the labour and material constraints