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The managing director of ABC Limited is setting the production plan for the next financial year. ABC has a shortage of skilled labour and wishes

The managing director of ABC Limited is setting the production plan for the next financial year. ABC has a shortage of skilled labour and wishes to maximise the profitability of the company. ABC manufactures three products X, Y and Z. There is 200 000 hours of skilled labour hours available in the year at a cost of $10 per hour. The following information relates to each product.

X Y Z
Selling Price 50 54 84
Material cost per unit 10 12 20
Labour hours per unit 2 3 4
Maximum demand 40000 20000 40000

Assuming all relevant information is provided, in what order should ABC manufacture to maximize profit in the current year?

Select one:

A.

Z then X

B.

X then Z

C.

X, Y and then Z

D.

Z, X and then Y

E.

X, Z and then Y

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