Question
Zayn.Co. manufacture 3 products for which details are as follows: A B C Selling price $25 $20 $15 Materials 7 6 5 Labor (@ 75c
Zayn.Co. manufacture 3 products for which details are as follows:
| A | B | C |
Selling price | $25 | $20 | $15 |
Materials | 7 | 6 | 5 |
Labor (@ 75c per hr.) | 9 | 6 | 3 |
Variable overheads Total direct cost
| 3 $19
| 3 $15
| 3 $11
|
Sales demand for the period is limited as follows:
Product A 4,000 units
Product B 6,000 units
Product C 6,000 units
The supply of labor is limited to 90,000 hours per period.
1) Calculate contribution per unit for X Ltd. Manufacture.
2) Calculate contribution per labor hours per unit.
3) Rank the products in relation to labor hour rate.
4) Draw up a production schedule showing how X Ltd. Manufacture would maximize profit in spite of the constraint.
(Please explain each step in layman terms)
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