The following standard data are available:

Product Able Baker

Direct materials per unit 10 30

Rate per hour

Direct labour:

Grinding 5.0 7 hours 5 hours

Finishing 7.5 15 hours 9 hours

Selling price - per unit 206.5 168

Budgeting production 1200 units 600 units

Maximum sales for the period 1500 units 800 units

Notes: (1) No closing stocks are anticipated.

(2) The skilled labour used for the grinding processes is highly specialised and in short supply, although there is sufficient to meet the budgeted production.

Required: (a) Prepare a statement showing the contribution from each product based on the budgeted production.

(b) If the firm would decide to organise the production based on the maximum sales for the period, how would you prioritise the production, how would you allocate the number of hours per product.

(c) How much is the total contribution (money) of each product in terms of grinding hours used?