ABC Company has two products, X and Y. Both products are produced on the same machine. The maximum operating capacity of the machine is 5,500hours. X requires 3 hours of machine time, while Y requires 5 hours of machine time. Other data regarding X and Y are as follows:

Selling price per unit Direct materials per unit Direct labour cost per hour Variable MOH per DLH FOH rate per MH Variable selling & Admin

XY 128.00 98.00

6.00 3.50 15.00 15.00 5.50 6.60

4.00 4.00 25.00 20.00

Product X requires 2.5 DLHs and Product Y requires 1.5 DLHs. Total fixed manufacturing costs for the year are 22,000. The demand for Product X is 600 units and the demand for product Y is unlimited. Fixed selling and admin costs are 8,000.

Required: What is the optimal production quantity of Product X and

Product Y?

2021-11-26