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Question - ABC Manufacturing Company manufactures two products which require both machine processing and labor operations. Although there is unlimited demand for both products, ABC would devote all of its capacities to a single product. Unit prices, cost data, and processing requirements are shown below:
Product A
Product B
Unit selling price
P400.00
P1,100.00
Unit variable costs
200.00
450.00
Machine hours per unit
40.00
14.00
Labor hours per unit
20.00
60.00
In 2019, the company will be limited to 160,000 machine hours and 120,000 labor hours.
Required -
1. Compute the quantities of each product to be produced in 2019.
2. Show the income statement for the product volume computed in no. 1.
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