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PDR Co. manufactures 4 products using the same machinery. The following details relate to its 4 products. Product A Product B Product C Product D

PDR Co. manufactures 4 products using the same machinery. The following details relate to its 4 products.

Product A

Product B

Product C

Product D

$ per unit

$ per unit

$ per unit

$ per unit

Selling price

28

30

45

42

Direct material

5

6

8

6

Direct labour

4

4

8

8

Variable overhead

3

3

6

6

Fixed overhead *

8

8

16

16

Profit

8

9

7

6

Labour hrs.per unit

1

1

2

2

Machine hrs.per unit

4

3

4

5

Units

Units

Units

Units

Maximum weekly demand

200

180

250

100

*Absorbed based on budgeted labour hours of 1,000 per week.

There is a maximum of 2,000 machine hours available per week

Required:

  1. Determine the production plan which would maximise the weekly profit of PDR Co

  2. Prepare a profit statement showing the profit your plan would yield

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