Question
CIND Ltd produces three brush sets; the artists set, the painters set and the make-up set. The following data for each brush is available for
CIND Ltd produces three brush sets; the artists set, the painters set and the make-up set.
The following data for each brush is available for the next quarter:
Demand sets (units) | 150 | 300 | 350 |
| Artist | Painters | Make up |
|
|
|
|
Sale Revenue per unit | 43 | 35 | 25 |
Variable costs per unit | 37 | 27 | 16 |
Allocated Fixed costs per unit | 7 | 2 | 4 |
Profit per unit | (1) | 6 | 5 |
All brush sets use animal hair as follows:
| Artist | Painters | Make up |
Hair per set (grammes) | 12 | 20 | 36 |
The supplier for animal hair has gone bankrupt and supply will be affected for the next quarter.
With reference to the above explain the concept of a limiting factor.
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