Question
Avanti Ltd produces two mixers. Stand mixer and hand mixer . The selling price of a Stand mixer is $500, and the selling price of
Avanti Ltd produces two mixers. Stand mixer and hand mixer. The selling price of a Stand mixer is $500, and the selling price of a hand mixer is $150. The variable cost per unit for the stand mixer is $300 and the variable cost per unit of the hand mixer is $ 100. The direct labour hour requirement and demand for the two products are:
| stand mixer | Hand mixer | ||
| Monthly demand | 500 | 1000 | |
| Direct Labour hour required per unit | 2.5 hours | 1.5 hours | |
Avanti Ltd's production capacity is 1500 direct labour hours. The optimal profit that Avanti can get from these products is :
| $ 108, 300 | ||
| $ 128, 300 | ||
| $ 100,000 | ||
| None of the above |
What is the correct option?
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Advanced Accounting
Authors: Joe Hoyle, Thomas Schaefer, Timothy Doupnik
10th edition
0-07-794127-6, 978-0-07-79412, 978-0077431808
