Trinity product Limited makes and sells three types of electronic security systems for which the following information is available. Standard cost and selling price per unit. DETAILS DAY SCAN NIGHT SCAN OMNI SCAN GH¢ GH¢ GH¢ Materials 70 110 155 Manufacturing Labour 40 55 70 Installation Labour 24 32 44 Variables Overheads 16 20 28 Selling Price 250 320 460 The fixed cost for the period is GH¢450,000 and installation labor, which is highly skilled is available for 25,000 hours only in a period and is paid GH¢8 per hour. Both manufacturing and installation labor is variable costs. The maximum demand for the period is Day scan 2,000 units; Night scan 3,000 units; Omni scan 1,800 units. Required: a) Calculate the per units installation hours required for all the systems b) Having carried out an investigation of the availability of installation labour, the firm thinks that by offering GH¢ 12 per hour, additional installation would become available and thus overcome the labour shortage. Based on the result obtained above, you are required to advice the firm whether or not to implement this proposal.
Trinity product Limited makes and sells three types of electronic security systems for which the following information is available.
|
DETAILS |
DAY SCAN |
NIGHT SCAN |
OMNI SCAN |
|
GH¢ |
GH¢ |
GH¢ |
|
|
Materials |
70 |
110 |
155 |
|
Manufacturing Labour |
40 |
55 |
70 |
|
Installation Labour |
24 |
32 |
44 |
|
Variables |
16 |
20 |
28 |
|
Selling Price |
250 |
320 |
460 |
The fixed cost for the period is GH¢450,000 and installation labor, which is highly skilled is available for 25,000 hours only in a period and is paid GH¢8 per hour. Both manufacturing and installation labor is variable costs. The maximum demand for the period is Day scan 2,000 units; Night scan 3,000 units; Omni scan 1,800 units.
Required:
a) Calculate the per units installation hours required for all the systems
b) Having carried out an investigation of the availability of installation labour, the firm thinks that by offering GH¢ 12 per hour, additional installation would become available and thus overcome the labour shortage. Based on the result obtained above, you are required to advice the firm whether or not to implement this proposal.
Step by step
Solved in 3 steps
