| Profit Maximisation - Exercise 3.30 | Unnamed: 1 | Unnamed: 2 | Unnamed: 3 | Unnamed: 4 | SOLUTION |
|---|---|---|---|---|---|
| (a) | Classic | Deluxe | Modern | Total | |
| Units demanded | 1000 | 800 | 500 | ||
| Labour hours per unit | 2 | 2.5 | 2 | ||
| Total labour hours required | 2000 | 2000 | 1000 | 5000 | |
| (b) | Selling price | 90 | 150 | 115 | |
| Less Variable costs | 45 | 85 | 60 | ||
| Contribution per product | 45 | 65 | 55 | ||
| (c) | Contribution per product | 45 | 65 | 55 | |
| Labour hours per unit | 2 | 2.5 | 2 | ||
| Contribution per labour hour | 22.5 | 26 | 27.5 | ||
| (d) | Order of priority | first | Modern | ||
| second | Deluxe | ||||
| third | Classic | ||||
| (e) | Labour hours available for production | 1750 | 2000 | 1000 | 4750 |
| (f) | Labour hours available | 1750 | 2000 | 1000 | |
| Labour hours per unit | 2 | 2.5 | 2 | ||
| 875 | 800 | 500 | |||
| units | units | units | |||
| (g) | Contribution per labour hour | 22.5 | 26 | 27.5 | |
| Labour hours | 1750 | 2000 | 1000 | ||
| Total Contribution | 39375 | 52000 | 27500 | 118875 | |
| (h) | Less fixed costs | 65000 | |||
| Profit | 53875 |