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Zayn.Co. manufacture 3 products for which details are as follows: ...

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Question

Accounting

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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