Problem 11. Maximization of a scarce resources.
Marawi Corporation has 52,000 available machine hours and has a fixed overhead rate of P4
per hour. It is considering to produce two popular products with the following production and
costs data:
					Dragon Ball	Samurai X
Costs if purchased from outside supplier					P 70	P 105
Direct materials					11	22
Direct labor					25	38
Factory overhead at P9 per hour					18	27
Annual demand in units					20,000	15,000
Required:
1. Assuming that there is no market limitation, which product should Marawi Corporation
produce?
2. Considering the market limits, how would Marawi Corporation use its limited machine hours
to maximize profit?
3. Assuming that the unit direct materials cost of Samurai X decreases to P10 and considering
the market limit, how would the limited machine hours be used to maximize profit?

Marawi Corporation has 52,000 available machine hours and has a fixed overhead rate of P4 per hour. It is considering to produce two popular products with the following production and Required: 1. Assuming that there is no market limitation, which product should Marawi Corporation produce? 2. Considering the market limits, how would Marawi Corporation use its limited machine hours to maximize profit? 3. Assuming that the unit direct materials cost of Samurai X decreases to P10 and considering the market limit, how would the limited machine hours be used to maximize profit