Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Task 3: Lanka Bangla Ltd make two products: Product Elmo Grover Selling price, 240 180 Direct material, 70 80 Direct labour, 60 30 Variable overhead,
Task 3: Lanka Bangla Ltd make two products: Product Elmo Grover Selling price, 240 180 Direct material, 70 80 Direct labour, 60 30 Variable overhead, 20 10 Fixed overhead, 16 8 Labour hours per unit 4 2 Machine hours per unit 5 6 Material S qty per unit 6 4 The variable and fixed overhead absorbed to each product is based on labour hours. The fixed overhead is currently allocated on the basis of 1,200 budgeted labour hours per month based on a production budget of 200 of each product per month. Estimated demand for Elmo is 240 per month and for Grover 320 per month. Lanka Bangla Ltd are looking at their ability to increase capacity. Initial investigations show that labour is limited to 2,000 hours per month, machine hours are limited to 3,000 per month and the supplier of Material S can supply up to 4,000 of these per month. Required 6 Sensitivity: Internal ((i) Identify which of the constraints will apply to Lanka Bangla Ltd if they attempt to increase production to meet demand. (ii) Calculate the contribution per limiting factor. (iii) Determine the optimal monthly production plan for Lanka Bangla Ltd
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started