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Question 2. Furniture plc. can manufacture three different types of product (X, Y and Z) using the same staff. Various estimates for next year have
Question 2. Furniture plc. can manufacture three different types of product (X, Y and Z) using the same staff. Various estimates for next year have been made. Service $/unit $/unit $/unit 120 156 Selling price Variable material cost Other variable costs Staff time required (hours) Total fixed costs for next year are expected to be $180,000. Required: a. If the business were to manufacture only product X next year, how many units of production would it need to provide in order to break-even? b. If the business were to manufacture only product Y next year and the expected market for product Y for next year in these circumstances was 10,000 units, calculate the margin of safety for product Y. C. If the business has a maximum of 20,000 staff hours next year, in which order of manufacturing preference would the three products come? d. Using your calculations from b) above, if the maximum market for next year for the three products were 3,000 units of X, 5,000 units of Y and 2,000 units of Z, what quantities of which product should the business provide next year and how much profit would this be expected to yield
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