What is the optimal production plan for baseheart williams

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Reference no: EM132971479

Baseheart Williams Limited produces two products, the Cee and the Dee, which both use the same grade of specialist labour. Only 3600 specialist labour hours are estimated to be available for the 20X8 financial year because of skills shortages in the economy as a whole.

The directors must decide on a production plan for 20X8. They estimate that it would be possible to sell 400 units of Cee and 400 units of Dee but the actual amount that can be produced and sold is likely to be limited by the labour shortage.

The following information is available about the products:

                                                                                          Cee           Dee

                                                                                        £                    £

Revenue per unit                                                600           666

Variable costs per unit                                           250           270

Contribution                                                        450            396

Number of hours of specialist labour required per unit        7           6

Problem 1: What is the optimal production plan for 20X8 (to the nearest whole unit)?

a. 400 units of Dee and 200 units of Cee

b. 400 units of Cee and 133 units of Dee

c. 400 units of Dee and 171 units of Cee

d. 400 units of Cee and 114 units of Dee

Reference no: EM132971479

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