| Profit Maximisation - Exercise 3.29 | Unnamed: 1 | Unnamed: 2 | Unnamed: 3 | SOLUTION |
|---|---|---|---|---|
| (a) | Standard | Executive | Total | |
| Units demanded | 1600 | 800 | ||
| Machine hours per unit | 1.5 | 2 | ||
| Total machine hours required | 2400 | 1600 | 4000 | |
| (b) | Selling price | 195 | 225 | |
| Less Variable costs | 105 | 135 | ||
| Contribution per product | 90 | 90 | ||
| (c) | Contribution per product | 90 | 90 | |
| Machine hours per unit | 1.5 | 2 | ||
| Contribution per machine hour | 60 | 45 | ||
| (d) | Order of priority | first | Standard | |
| second | Executive | |||
| (e) | Machine hours available for production | 2400 | 1200 | 3600 |
| (f) | Machine hours available | 2400 | 1200 | |
| Machine hours per unit | 1.5 | 2 | ||
| 1600 | 600 | |||
| units | units | |||
| (g) | Contribution per machine hour | 60 | 45 | |
| Machine hours | 2400 | 1200 | ||
| Total Contribution | 144000 | 54000 | 198000 | |
| (h) | Less fixed assets | 30000 | ||
| Profit | 168000 |