Question
Syarikat Padu manufactures three different types of desk:Jati, Rubber and Rattan. Now, space is limited in the factory and there is a restriction on the
Syarikat Padu manufactures three different types of desk:Jati, Rubber and Rattan. Now, space is limited in the factory and there is a restriction on the number of machine hours available. Costs and selling price information for the financial year 1 January to 31 December 2022 for each type of desk is as follows:
| Jati Desk | Rubber Desk | Rattan Desk |
| RM | RM | RM |
Selling price per unit | 1,750 | 1,600 | 1,650 |
Variable materials costs: |
|
|
|
Wood and plastics | 480 | 460 | 486 |
Screws and fixings | 20 | 20 | 20 |
Variable labour costs | 180 | 160 | 160 |
Variable machine costs | 50 | 40 | 44 |
Share of fixed costs | 220 | 240 | 200 |
Machine hours required per unit | 2.5 hours | 2.0 hours | 2.2 hours |
Sales demand in units for 2020 | 1350 | 1550 | 1450 |
Machine hours available are 4,000 hours during 2022.
Fixed costs for 2022 are expected to be RM940,000.
Required:
(b) Advise the directors of Syarikat Padu on the combination of products that should be manufactured if the business is to produce the highest profit without further expansion of the premises. Are there any unsatisfied demand?
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