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Elite 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.
Elite 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 per unit. The maximum capacity for machine time is 12,000 hours. (a) Calculate the TPAR for the product. (5 marks) (b) State three ways in which the TPAR can be improved
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