Question
Wildwest Limited manufactures specialist factory equipment. Wildwest estimates that only 200,000 hours of labour at a rate of $40 per hour will be available in
Wildwest Limited manufactures specialist factory equipment. Wildwest estimates that only 200,000 hours of labour at a rate of $40 per hour will be available in the next financial year. The following details relate to Wildwest's planned production of three products A, B and C for the next 12 months.
| A |
| B |
| C | ||||||
Selling price per unit |
| $ | 100 |
| $ | 325 |
| $ | 200 |
| |
Materials cost per unit |
| $ | 10 |
| $ | 70 |
| $ | 40 |
| |
Labour hours per unit |
|
| 2 |
|
| 5 |
|
| 4 |
| |
Maximum demand |
|
| 90 000 |
|
| 30 000 |
|
| 25 000 |
| |
To maximise profits the products Wildwest Limited should manufacture are:
A.
B then A
B.
B then C, then A
C.
A then C, then B
D.
B then A, then C
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