Question 5 rame Limited makes three products: A, B and C. The budget for the following three months was as follows: Sales units Sales price per unit Variable cost per unit 10 p A B 1,000 1,500 €31 €10 €20 2,000 €10 €8 €4 However, the machine which is used in the production of all three products has malfunctioned. A temporary repair job has been done, but the total machine hours available for the next three months (until the replacement machine arrives) has been reduced to 4,800 hours. Each unit of product A requires 3 machine hours, each unit of Product B requires 1 machine hour and each unit of Product C requires 0.75 hours. On this basis, for the next three months, the product that Frame Limited will prioritise in relation to production is Product Under the revised plan, the production and sales of Product A will be units.
Question 5 rame Limited makes three products: A, B and C. The budget for the following three months was as follows: Sales units Sales price per unit Variable cost per unit 10 p A B 1,000 1,500 €31 €10 €20 2,000 €10 €8 €4 However, the machine which is used in the production of all three products has malfunctioned. A temporary repair job has been done, but the total machine hours available for the next three months (until the replacement machine arrives) has been reduced to 4,800 hours. Each unit of product A requires 3 machine hours, each unit of Product B requires 1 machine hour and each unit of Product C requires 0.75 hours. On this basis, for the next three months, the product that Frame Limited will prioritise in relation to production is Product Under the revised plan, the production and sales of Product A will be units.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Question 5
rame Limited makes three products: A, B and C.
The budget for the following three months was as follows:
Sales units
Sales price per unit
Variable cost per unit
10 p
A
B
1,000
1,500
€31
€10
€20
2,000
€10
€8
€4
However, the machine which is used in the production of all three products has malfunctioned. A temporary repair job has been done, but the
total machine hours available for the next three months (until the replacement machine arrives) has been reduced to 4,800 hours.
Each unit of product A requires 3 machine hours, each unit of Product B requires 1 machine hour and each unit of Product C requires 0.75 hours.
On this basis, for the next three months, the product that Frame Limited will prioritise in relation to production is
Product
Under the revised plan, the production and sales of Product A will be
units.
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