The management of M&M, a subsidiary of Daffodil, is concerned about its inability to obtain enough trained labour to enable it to meet its current budgeted projection: Service A B C Total Sales revenue 47 37 41 125 Variable costs Materials 8 6 7 21 Labour 11 8 14 33 Expenses 5 4 4 13 Allocated fixed cost 6 15 12 33 Total cost 30 33 37 100 Profit 17 4 4 25

The available labour cost to spend is 23,000. All the laboursare paid at the same hourly rate across the services. You are requested to prepare a planto produce ahigher profit, ensuring that at least 50 per cent of the budgeted sales revenues could be achieved for each service. Prepare the statement, with explanations, showing the highest profit could be achieved from the limited amount of skilled labour available within the constraint stated.