Question
Bellring Ltd produces two products: Cordless and standard phone. The selling price of a Cordless phone is $200, and the selling price of a standard
Bellring Ltd produces two products: Cordless and standard phone. The selling price of a Cordless phone is $200, and the selling price of a standard phone is $50. The variable cost per unit for the cordless phone is $50 and the variable cost per unit of the standard phone is $ 20. The direct labour hour requirement and demand for the two products are:
Cordless | Standard | ||
Monthly demand | 400 | 250 | |
Direct labour hour required per unit | 4 hours | 1.5 hours | |
Bellring Ltd's production capacity is 2500 direct labour hours. To maximise the profit, Bellring Ltd should produce:
400 units of cordless and 250 standard phone | ||
400 units cordless phone only | ||
400 units of cordless and 333 standard phone | ||
None of the above |
Which is the correct option?
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