Question
The following information is available for Armband Bhd which manufactures and sells three products, A, B and C. Product A (RM) Product B (RM) Product
The following information is available for Armband Bhd which manufactures and sells three products, A, B and C.
|
| Product A (RM) | Product B (RM) | Product C (RM) |
| Cost per unit
Direct material |
(6 kg) 24 |
(7 kg) 28 |
(4 kg) 16 |
| Direct labour | (2 hrs) 16 | (1.5 hrs) 12 | (1 hr) 8 |
| Variable overhead | 16 | 12 | 8 |
| Fixed overhead
Selling price
Maximum sales units | 8 | 6 | 4 |
| 64 | 58 | 36 | |
| 80 | 67 | 43 | |
| 10,000 | 16,000 | 12,000 |
- Assuming there was a shortage of labour, and the maximum hours available were limited to 40,000, calculate:
- The number of units of each product Armband Bhd should offer for sale
- The maximum profit (10 marks)
- If the maximum hours were still limited to 40,000 and Armband Bhd must sell a minimum of 6,000 units of each product:
- How many units of each product should the company offer for sale?
- What would be the maximum profit? (10 marks)
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Financial and Managerial Accounting
Authors: Jonathan E. Duchac, James M. Reeve, Carl S. Warren
11th Edition
9780538480901, 9781111525774, 538480890, 538480904, 1111525773, 978-0538480895
