Question
The company manufactures two products - A and B. Company can use direct labor time, 28 000 hours and material B 32 000 kg. What
The company manufactures two products - A and B. Company can use direct labor time, 28 000 hours and material B 32 000 kg. What is the product production plan which will ensure maximum profit, assuming that the fixed cost per month is 26 100 euro, and that there is not any product stock at the beginning of period? 4. Company manufactures molds for casting aluminium alloy test samples. Fixed costs amount to 20 000,- per year. Variable costs for each unit manufactured are 16,- sales price is 28,- a) Calculate the breakeven point in unit sales b) what is the operating profit (loss) if the company manufactures and sells i) 1 500 units per year ii) 3 000 units per year c) Calculate the breakeven point in unit sales if variable costs decrease by 20% and selling price decrease by 10 %. Item name A B Direct material costs (euro per unit) 4 6 Direct labor cost (euro per hour) 2 3 Variable overheads 4 5 Labour time, hours per unit 3 2 Material B for production, kg 3,5 5 Sales price 24 28 Demand for the products (in units) 1800 5200
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