X limited is considering producing 3 products A, B and C. the information regarding these products...

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X limited is considering producing 3 products A, B and C. the information regarding these products is as follows: Selling price Labor (£2 per hour) Material (£1 per kg) Input per unit of product Labor (hours) Maximum demand per annum £ 30 15 A £ 60 15 1000 units £ 20 30 B £ 80 10 800 units £ 60 20 с £ 100 30 600 its Assume that labor is a scarce resource and restricted to 20,000 hours per annum? Required 1. Calculate whether the limit on the availability of the factor will prevent annual demand being satisfied. (3 points) 2. Calculate the contribution per unit of the limiting factor for all three products. (3 points) 3. Determine the product mix in units that will produce the optimal contribution of the limiting resource for X Limited assuming the labor is restricted to 20,000 hours per annum. (5 points) 4. Calculate the total contribution in (£) of the product mix selected. (4 points) 5. Hassan Al-Ghamdi, a new co-op trainee at X Limited does not understand why the C-V-P income statement is prepared by X Limited alongside the traditional income statement. This what he said: "the two statements show the same net income and so what is the rationale for preparing the two?". Explain to Hassan the difference between the two statements and the importance of preparing the C-V-P statement. (5 points) X limited is considering producing 3 products A, B and C. the information regarding these products is as follows: Selling price Labor (£2 per hour) Material (£1 per kg) Input per unit of product Labor (hours) Maximum demand per annum £ 30 15 A £ 60 15 1000 units £ 20 30 B £ 80 10 800 units £ 60 20 с £ 100 30 600 its Assume that labor is a scarce resource and restricted to 20,000 hours per annum? Required 1. Calculate whether the limit on the availability of the factor will prevent annual demand being satisfied. (3 points) 2. Calculate the contribution per unit of the limiting factor for all three products. (3 points) 3. Determine the product mix in units that will produce the optimal contribution of the limiting resource for X Limited assuming the labor is restricted to 20,000 hours per annum. (5 points) 4. Calculate the total contribution in (£) of the product mix selected. (4 points) 5. Hassan Al-Ghamdi, a new co-op trainee at X Limited does not understand why the C-V-P income statement is prepared by X Limited alongside the traditional income statement. This what he said: "the two statements show the same net income and so what is the rationale for preparing the two?". Explain to Hassan the difference between the two statements and the importance of preparing the C-V-P statement. (5 points)

Answer rating: 100% (QA)

ANSWER 1 The limit on the availability of the factor will not prevent annual demand from being satis... View the full answer