A small company produces two products, x and y. Product x requires 1 hour of labour and 6 tons of raw materials, whereas each unit of product y requires 2 hours of labour and 5 tons of raw material. The number of hours available each week is 40 and the available raw materials each week is 150 tons. If the contribution to profit is £2 per unit of product x and £3 per unit of y, determine the weekly production mix that will maximize profits.

A small company produces two products, x and y. Product x requires 1 hour of labour and 6 tons of raw materials, whereas each unit of product y requires 2 hours of labour and 5 tons of raw material. The number of hours available each week is 40 and the available raw materials each week is 150 tons. If the contribution to profit is £2 per unit of product x and £3 per unit of y, determine the weekly production mix that will maximize profits.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

A firm produces products X, Y and Z with contribution margins of $4, $5 and $10 respectively. The firm has only 5000 machine hours available for a particular period. Machine hours required for each of the products are 1, 1 and 4 hours respectively. Demand for the products is 1000 for X, 3000 for Y and 2000 for Z. How many units of product Z should be produced to maximize profit?
The total cost of producing w phone sets per day at Cutting Edge Electronics plant is $( ½ w2 + 70w + 50), and the price at which each set may be sold is $(100 – w). What should be the daily output of Cutting Edge Electronics so as to obtain a maximum total profit and show that the cost of producing a set is a relative minimum at that output.
A company produces a product and sells 25,000 units a month at a selling price of £30. Direct material cost is £12 per unit and direct labour cost is £10 per unit of output. The total fixed cost is £120,800. The factory has a maximum production capacity of 40,000 units. Calculate the break-even level of output and the margin of safety ratio
Suppose a company has 3 products. Product A has a contribution margin per unit of $15, product B has a contribution margin per unit of $25, and product C has a contribution margin per unit of $32. For every 3 units sold of product A the company sells 2 units of product B and 5 units of product C. The company has fixed costs of $835,000. Suppose that the company wants to make a profit of $3,500,000. How many units of each product must the company sell to achieve this goal?
A company has fixed costs of $320,000 and a contribution margin per unit of $15. If the company wants to earn income of $40,000, how many units must be sold?
Your Company has a limit of 65,000 machine hours for the production. It produces three products, with costs and selling prices as follows: Products C Demand in units 20,000 18,000 15,000 Selling price per unit $30 $20 $15 CM ratios 35% 25% 60% 3. 3 MH per unit What is the maximum contribution margin Your Company can make?
Ptarmigan Company produces two products. Product A has a contribution margin of $65.00 and requires 10 machine hours. Product B has a contribution margin of $46.20 and requires 7 machine hours. Determine the most profitable product assuming the machine hours are the constraint. If required, round your answers to two decimal places. Contribution margin per machine hour: Product A $ Product B $ Product is the most profitable.
A new product can be sold at OMR 50 per unit. The fixed cost is 8,640. The variable cost per unit is OMR 30. The company produces 900 units. What is the total profit if the company sells 900 units?
Each of two similar companies has sales of $20,000 and total costs of $15,000 for a month. Company A’s total costs include $10,000 of variable costs and $5,000 of fixed costs. If Company B’s total costs include $4,000 of variable costs and $11,000 of fixed costs, which company will enjoy more profit if sales double?
There is a fixed cost of $40,000 to start a production process. Once the process has begun, the variable cost per unit is $25. The revenue per unit is projected to be $55. Write an expression for total profit.
Suppose a company can make a unit of product for $7 in variable labor and materials and sell it for $10. A. Determine the contribution and contribution margin. B. What is the breakeven sales level in units and dollars for the company if the firm has fixed costs of $1,800 per month?
Clockmaker Ltd. makes a product called wallet. Managers from Clockmaker Ltd. want to achieve a profit of £82, 800. The wallet price equals £82 per unit. Each unit of wallet has a cost of £36 and annual total fixed costs equal £147, 200. Considering this information, which of the following statements is true? O a. To achieve the desired profit, Clockmaker Ltd. needs to sell 5, 000 units of wallet. O b. Clockmaker Ltd. would need to sell more than 3, 200 units of wallet to have positive profits. O c. Contribution per unit equals £46. O d. All the answers are true.