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direct thumbs up X limited is considering producing 3 products A, B and C. the information regarding these products is as follows: A B f
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X limited is considering producing 3 products A, B and C. the information regarding these products is as follows: A B f f 60 f 80 100 Selling price Labor (2 per hour) Material (1 per kg) 30 15 20 30 60 20 Input per unit of product Labor (hours) Maximum demand per annum 10 15 1000 units 30 600 its 800 units Assume that labor is a scarce resource and restricted to 20,000 hours per annum? Required 1. Calculate whether the limit on the availability of the factor will prevent annual demand being satisfied. (3 points) 2. Calculate the contribution per unit of the limiting factor for all three products. (3 points) 3. Determine the product mix in units that will produce the optimal contribution of the limiting resource for X Limited assuming the labor is restricted to 20,000 hours per annum. (5 points) 4. Calculate the total contribution in () of the product mix selected. (4 points) 5. Hassan Al-Ghamdi, a new co-op trainee at X Limited does not understand why the C-V-P income statement is prepared by X Limited alongside the traditional income statement. This what he said: "the two statements show the same net income and so what is the rationale for preparing the two?". Explain to Hassan the difference between the two statements and the importance of preparing the C-V-P statement. (5 points) Step by Step Solution
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