Question
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
Step by Step Solution
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Step: 2
Step: 3
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