Determine the mix of products that should be produced

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Reference no: EM132622723

Problem - Deco2U manufactures home decoration items based on demand from various agents in the Klang Valley. Deco2U focuses on production of the three products as demands for these products are increasing. The machine capacity for the production is currently limited to 4,000 hours because of the system upgrading process.

The following information is available for the three products:

 

Products

 

Anggun

Klasik

Elegan

Selling price per unit

RM60

RM70

RM85

Variable cost per unit

RM25

RM30

RM40

Machine hour required per unit of output

2 hours

2 hours

2.5 hours

Estimated sales demand

900 units

700 units

500 units

Required machine hours

1,800 hours

1,400 hours

1,250 hours

Required -

(a) Determine the mix of products that should be produced during the period.

(b) List TWO (2) qualitative factors that management should consider in reaching a final decision.

Reference no: EM132622723

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