Buraaq Corporation produces three products: Alpha, Beta and Gamma. The following information is available: • The wage rate for direct labour is PKRXX per hour. The variable overhead relates to machinery costs and is PKR 0.50 per machine hour. Information per unit Maximum demand in units Variable overhead (PKR) Material (PKR) Direct labour (PKR) Selling price (PKR) Direct labour (hours) Alpha 10,000 Beta Gamma 11, 000 8, 000 0.5 1.5 3.5 4 4 4 5 10 15 20 0.4 hours 0.4 hours 0.5 hours Required: • Calculate the contribution per unit for each of the products Alpha, Beta and Gamma. • Calculate the total contribution earned by Buraaq Corporation if the company makes enough of each product to meet the maximum demand for each product. • Calculate the total number of machine hours and labour hours needed to produce the maximum demand of all three products.
Buraaq Corporation produces three products: Alpha, Beta and Gamma. The following information is available: • The wage rate for direct labour is PKRXX per hour. The variable overhead relates to machinery costs and is PKR 0.50 per machine hour. Information per unit Maximum demand in units Variable overhead (PKR) Material (PKR) Direct labour (PKR) Selling price (PKR) Direct labour (hours) Alpha 10,000 Beta Gamma 11, 000 8, 000 0.5 1.5 3.5 4 4 4 5 10 15 20 0.4 hours 0.4 hours 0.5 hours Required: • Calculate the contribution per unit for each of the products Alpha, Beta and Gamma. • Calculate the total contribution earned by Buraaq Corporation if the company makes enough of each product to meet the maximum demand for each product. • Calculate the total number of machine hours and labour hours needed to produce the maximum demand of all three products.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Buraaq Corporation produces three products: Alpha, Beta and Gamma. The following
information is available:
The wage rate for direct labour is PKRXX per hour.
• The variable overhead relates to machinery costs and is PKR 0.50 per machine hour.
Information per unit
Maximum demand in units
Variable overhead (PKR)
Material (PKR)
Direct labour (PKR)
Selling price (PKR)
Direct labour (hours)
Alpha
10,000
Beta
Gamma
11, 000
8, 000
0.5
1.5
3.5
4
4
4
5
10
15
20
0.4 hours
0.4 hours
0.5 hours
Required:
• Calculate the contribution per unit for each of the products Alpha, Beta and Gamma.
• Calculate the total contribution earned by Buraaq Corporation if the company makes
enough of each product to meet the maximum demand for each product.
• Calculate the total number of machine hours and labour hours needed to produce the
maximum demand of all three products.
Calculate the contribution PER MACHINE hour for each product.
• If Buraaq Corporation is limited to 49,000 hours of machine time, devise an optimal
production plan which would maximize total contribution.
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