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Assume that ABC Limited manufacturers 3 components; A, B and C using the same machine. The components are assembled into units of product X. One
Assume that ABC Limited manufacturers 3 components; A, B and C using the same machine. The components are assembled into units of product X. One unit of this product requires one component of A, B and C each. The budget for next year requires production of 4,000 units X at the following costs. Variable costs Machine hours required Subcontractors Price A Ksh 20 3 hours Ksh 29 B Ksh 36 2 hours Ksh 40 C Ksh 24 4 hours Ksh 34 Only 24,000 machine hours will be available during the next year. Required: Advice the company.
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