The following details relate to ready meals that are prepared by a food processing company: Ready meal
Question:
The following details relate to ready meals that are prepared by a food processing company:
Ready meal
P
Q
R
/meal
/meal
/meal
Selling price
5.00
3.00
4.00
Ingredients
2.00
1.00
1.30
Variable conversion costs
1.60
0.80
1.85
Fixed conversion costs*
0.50
0.30
0.60
Profit
0.90
0.90
0.65
Oven time (minutes per ready meal)
10
4
8
Each of the meals is prepared using a series of processes, one of which involves cooking the ingredients in a large oven. The availability of cooking time in the oven is limited and, because each of the meals requires cooking at a different oven temperature, it is not possible to cook more than one of the meals in the oven at the same time.
*The fixed conversion costs are general fixed costs that are not specific to any type of ready meal.
(a)Determine the priority of production of the three meals.3 marks