Solution-How the available capacity of max and lex should

How the available capacity of max and lex should be utilised

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Reference no: EM132638929

Study the scenario and complete the questions that follow. Narbonne Limited manufactures two types of products: Max and Lex. Only one type of raw material is used to manufacture both products. The cost details oi these products are as follows: Max Variable costs: R R Direct material @ Rosa per kg W Direct labour @ R500 per hour 2.50 2.75 Variable overheads @ R050 per machine hour 2.00 1.50 W Selling price per unit 10.00 10.00

Additional information:

1. Owing to a shortage in supply, only 6 000 kg of raw material is available per month No Inventory of raw materials or ?nished units are carried forward from one month to the next.

2. An unlimited number of labour hours are available.

3. Fixed costs amount to R1 920 per month and are allocated at full capacity at R040 per machine hour.

4. Potential sales per month: 0 Max 1,000 units - Lox 800 units Some: Hunoe. T.

Required:

Question 1: Determine how the available capacity of Max and Lex should be utilised to maximise pro?ts.

Reference no: EM132638929

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How the available capacity of max and lex should be utilised

Reference no: EM132638929

Reference no: EM132638929

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