Your company manufactures three products. Alpha. Beta and Gamma. The following information refers to next month: Alpha Beta Gamma Sales demand 50 150 200 Raw materials units GH¢ 100 GH¢ 150 GH¢ 80 Direct labor hours units 5 10 2 Fixed overheads units GH¢ 30 GH¢ 60 GH¢ 12 Direct labor is paid at GHc3.00 per hour. Variable overhead is equal to 10% of the cost of materials. Fixed overheads are absorbed to the products at the rate of 200% of the total direct labor cost. The selling price is calculated by doubling the prime cost (total direct cost) Required: 1.Calculate the contribution per unit for each product and rank them 2. Using the ranking from the previous answer in (1). prepare a forecast of the profit for each product and in total for next month if only 1,650 direct labor hours are available
Your company manufactures three products. Alpha. Beta and Gamma. The following information refers to next month:
|
|
Alpha |
Beta |
Gamma |
|
Sales demand |
50 |
150 |
200 |
|
Raw materials units |
GH¢ 100 |
GH¢ 150 |
GH¢ 80 |
|
Direct labor hours units |
5 |
10 |
2 |
|
Fixed |
GH¢ 30 |
GH¢ 60 |
GH¢ 12 |
Direct labor is paid at GHc3.00 per hour. Variable overhead is equal to 10% of the cost of materials. Fixed overheads are absorbed to the products at the rate of 200% of the total direct labor cost. The selling price is calculated by doubling the prime cost (total direct cost)
Required:
1.Calculate the contribution per unit for each product and rank them
2. Using the ranking from the previous answer in (1). prepare a
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