You have been engaged with PQR Ltd, a manufacturing company to provide advice on the most...

 

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You have been engaged with PQR Ltd, a manufacturing company to provide advice on the most profitable production plan for the company. The company makes three products Alpha, Beta and Gamma and the appropriate data are as follows for the year 2022: Cost per unit and selling price Alpha Beta Gamma RM RM RM Selling Price Direct Material Cost 45.00 50.00 38.00 12.5 15 7.5 Direct Labour Cost 8 6. (RM4 per direct labour hour) Additionnal Information 1. Variable overheads are absorbed at RM6 per direct labour hour 2. Fixed overheads total RM24,900. 3. Budgeted volume per annnum Products Units 1,200 units 1,800 units 1,500 units Alpha Beta Gamma There is a constraint on the direct labour hours, which is limited to 6,500 direct labour hours. The sales director has already accepted an order for 100 ALPHA, 200 BETA and 400 GAMMA which must be supplied. These quantities are included in the market demand estimates above. а. Identify any shortfall for the year 2022 based on the above information. b. Determine the production units of each product in order to maximise profit. с. Calculate the maximum profit based on your answer obtained in (b) above. You have been engaged with PQR Ltd, a manufacturing company to provide advice on the most profitable production plan for the company. The company makes three products Alpha, Beta and Gamma and the appropriate data are as follows for the year 2022: Cost per unit and selling price Alpha Beta Gamma RM RM RM Selling Price Direct Material Cost 45.00 50.00 38.00 12.5 15 7.5 Direct Labour Cost 8 6. (RM4 per direct labour hour) Additionnal Information 1. Variable overheads are absorbed at RM6 per direct labour hour 2. Fixed overheads total RM24,900. 3. Budgeted volume per annnum Products Units 1,200 units 1,800 units 1,500 units Alpha Beta Gamma There is a constraint on the direct labour hours, which is limited to 6,500 direct labour hours. The sales director has already accepted an order for 100 ALPHA, 200 BETA and 400 GAMMA which must be supplied. These quantities are included in the market demand estimates above. а. Identify any shortfall for the year 2022 based on the above information. b. Determine the production units of each product in order to maximise profit. с. Calculate the maximum profit based on your answer obtained in (b) above.

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Requirement for direct labour for Operation 1 Alpha Beta Gamm... View the full answer