• ITS ABOUT COST PROFIT VOLUME
• PLS NEED HELP TO ANSWER THIS QUESTION
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Print, Burn The management of a bushess Is concemed at$ Its Inability to obtain er.ough fully trained labour to enable It to meet Its present budget prqecuon tor Its three services, Alpha, Beta and Gamma. Variable costs Materials Allocated fixed costs Total cost Sales revenue Alpha cooo 6 9 3 6 24 15 39 Beta cooo 4 6 2 15 27 2 29 Gamma 5 12 2 12 31 2 33 Total 15 27 7 33 82 19 101 The amount of labour likely to be available amounts to 220,000. All of the variable labour is paid at the same hourly rate. You have been asked to prepare a statement ot plans ensuring that at least 50 per cent of the budgeted sales revenues are achieved for each service, and the balance of labour is used to produce the greatest profit. Required: (a) Prepare a statement, With explanations, showing the greatest profit available from the limited amount of skilled labour available, within the constraint stated. Hint: Remember that all labour Is paid at the same rate. (b) What steps could the business take in an attempt to improve profitability, in the light of the labour snortage?