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Bryan Ltd. produces microchips for various computing companies. The current selling price per unit is $2,700 and at this price demand has been 16,000 units.
Bryan Ltd. produces microchips for various computing companies. The current selling price per unit is $2,700 and at this price demand has been 16,000 units. Market research has revealed that for every increase of $100 in selling price, the demand falls by 2,000 units. Material cost per unit is $540 and the labour cost is $1,480. Required: (a) Calculate the optimum (profit maximizing) selling price of the microchip. (12 marks) Part b The following information relates to a product manufactured by McKay Enterprise: Direct material $30 Budgeted labour hours 50,000 Direct labour $21 Factory overheads $1,460,000 Labour rate $36 Selling price per unit $120 Machine hour is considered the bottleneck and the product requires 0.04 hour of machine time
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