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Company ZEE is currently producing and selling four products W.X,Y and Z. All this four products goes through the same production process during the course
Company ZEE is currently producing and selling four products W.X,Y and Z. All this four products goes through the same production process during the course of manufacture. The cost structure and selling price for each product are as follows: W X Y Z S $ Direct materials W W N V UI N W Direct labour 4 Variable overheads 6 Selling price 19 14 24 17The production manager is expecting a shortage of workers in the coming period. He has estimated that76 there would only be 20.000 direct labour hours in total available for all the four products. The direct labour are paid $2 per hour. The sales manager is expecting the sales of the four products to be as follows in the coming period : W - 5000 units X - 4000 units Y - 3000 units Z - 6000 units Required : i . Calculate the contribution per limiting factor for each product and rank the products in the order in which it should be produced and sold to achieve contribution. ii. Prepare a production and sales schedule in accordance with your answer in (i) above. iii. Compute the contribution that is lost by the restriction placed upon the production process by the limiting factor. iv . . Suggest any two alternatives to overcome the limiting factor problem in Company ZEE
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