| Profit Maximisation - Exercise 3.31 | Unnamed: 1 | Unnamed: 2 | Unnamed: 3 | Unnamed: 4 | SOLUTION |
|---|---|---|---|---|---|
| (a) | Dresser | Table | Chairs | Total | |
| Units demanded | 30 | 60 | 120 | ||
| Labour hours per unit | 10 | 9 | 5 | ||
| Total labour hours required | 300 | 540 | 600 | 1440 | |
| (b) | Selling price | 720 | 630 | 480 | |
| Less Variable costs | 450 | 360 | 300 | ||
| Contribution per product | 270 | 270 | 180 | ||
| (c) | Contribution per product | 270 | 270 | 180 | |
| Labour hours per unit | 10 | 9 | 5 | ||
| Contribution per labour hour | 27 | 30 | 36 | ||
| (d) | Order of priority | first | Chairs | ||
| second | Table | ||||
| third | Dresser | ||||
| (e) | Labour hours available for production | 160 | 540 | 600 | 1300 |
| (f) | Labour hours available | 160 | 540 | 600 | |
| Labour hours per unit | 10 | 9 | 5 | ||
| 16 | 60 | 120 | |||
| units | units | units | |||
| (g) | Contribution per labour hour | 27 | 30 | 36 | |
| Labour hours | 160 | 540 | 600 | ||
| Total Contribution | 4320 | 16200 | 21600 | 42120 | |
| (h) | Less fixed costs | 10500 | |||
| Profit | 31620 |