A large hotel, The Open Umbrella, has two kiosks. One sells sweets and is open 35 hours per week. The second sells newspapers and magazines and is open 55 hours per week. Unfortunately, next week labour is restricted to 70 hours. Labour is £10 per hour. Last week’s results when both were fully open and 90 labour hours were available are set out below

 Required:

How would you maximise the profi ts using the 70 labour hours available?

Transcribed Image Text:

Kiosk 1 (Sweets) Kiosk 2 (Newspapers) Revenue Less: Costs 1,075 1,475 Direct labour 350 550 Direct materials 600 700 Variable overheads 70 1,020 110 1,360 Contribution 55 115