The management of your company is concerned at its inability to obtain enough fully trained labour to enable it to meet its present budget projection.

The amount of labour likely to be available amounts to £20,000. You have been asked to prepare a statement ensuring that at least 50 per cent of the budget sales are achieved for each product and the balance of labour used to produce the greatest profit.

(a) Prepare a statement showing the greatest profit available from the limited amount of skilled labour available, within the constraint stated.

(b) Provide an explanation of the method you have used.

(c) Provide an indication of any other factors that need to be considered.

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Product: Direct costs: Materials Alpha Beta Gamma Total 6,000 4,000 5,000 15,000 Labour 9,000 6,000 12,000 27,000 Expenses 3,000 2,000 2,000 7,000 Allocated fixed costs 13,000 8,000 12,000 33,000 Total cost 31,000 20,000 31,000 82,000 Profit 8,000 9,000 2,000 19,000 Sales 39,000 29,000 33,000 101,000