1. Business
  2. Accounting
  3. section a q2 as engineering manager in your company ltd...

Question: section a q2 as engineering manager in your company ltd...

Question details

SECTION A Q.2 As Engineering Manager in Your Company Ltd. you are responsible for maximising the profit from four product lines W, X, Y and Z. You have been provided with the following information: Direct materials (kg) 75 90 85 70 Direct labour (h) Fabrication Assembly Packaging 4.5 8 3.5 4.5 9.5 4 3.5 6 Selling price per unit (S) 1400 2350 3000 1200 280 Max. sales for the period (in units) 400 300 450 Budgeted production 300 270 270 280 (in units ) Additional information is also provided 1 There are no closing stocks. 2. Material costs are estimated at £8.00/kg 3. The labour rate for the assembly and packaging operations is £16.00/h and £22/h for the fabrication process. The skilled labour required for the fabrication is in short supply although there is just enough to meet the current budgeted production 4. Required Prepare a statement showing the contribution from each product based on the budgeted production. (a) (8 marks) (b) Calculate the contribution per unit of limiting factor (2 marks) Prepare a statement showing the maximum total contribution that can be obtained. Explain your rationale (c) (10 marks)

Solution by an expert tutor
Blurred Solution
This question has been solved
Subscribe to see this solution