| Profit Maximisation - Exercise 3.27 | Unnamed: 1 | Unnamed: 2 | Unnamed: 3 | Unnamed: 4 | SOLUTION |
|---|---|---|---|---|---|
| (a) | Traditional | Modern | Alternative | Total | |
| Units demanded | 800 | 1200 | 720 | ||
| Machine hours per unit | 5 | 3.5 | 3 | ||
| Total machine hours required | 4000 | 4200 | 2160 | 10360 | |
| (b) | Selling price | 540 | 420 | 375 | |
| Less Variable costs | 270 | 210 | 150 | ||
| Contribution per product | 270 | 210 | 225 | ||
| (c) | Contribution per product | 270 | 210 | 225 | |
| Machine hours per unit | 5 | 3.5 | 3 | ||
| Contribution per machine hour | 54 | 60 | 75 | ||
| (d) | Order of priority | first | Alternative | ||
| second | Modern | ||||
| third | Traditional | ||||
| (e) | Machine hours available for production | 2440 | 4200 | 2160 | 8800 |
| (f) | Machine hours available | 2440 | 4200 | 2160 | |
| Machine hours per unit | 5 | 3.5 | 3 | ||
| 488 | 1200 | 720 | |||
| units | units | units |