A company manufactures three products as follows: Product X Product Y Product Z Selling price per unit
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A company manufactures three products as follows:
Product X | Product Y | Product Z | |
Selling price per unit | 75 | 95 | 95 |
Costs per unit: | |||
Direct Material @ 5 per metre | 10 | 5 | 15 |
Direct Labour @ 8 per hour | 32 | 48 | 40 |
Variable overhead | 8 | 12 | 10 |
Fixed overhead | 24 | 36 | 30 |
If direct materials are restricted in supply, in order to maximise profits, the products should be ranked as:
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