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4 AB DAC makes two products the Ay and the Be. Unit variable costs are as follows: Ay Be Direct materials 4 12 Direct labour
4 AB DAC makes two products the Ay and the Be. Unit variable costs are as follows:
Ay Be
Direct materials 4 12
Direct labour (12 per hour) 24 12
Variable overhead 4 4
32 28
The sales price per unit is 56 per Ay and 44 per Be. During March 2021 the available labour is limited to 8,000 hours. Sales demand in March is expected to be 3,000 units for Ays and 5,000 units for Bes.
Calculate the profit-maximising production mix for AB DAC.
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