All three products use the same material which costs £25 per kilogram but there is not enough material to meet the demand for all three products. In what order should these three products be produced if the company wishes to maximise its profit?

All three products use the same material which costs £25 per kilogram but there is not enough material to meet the demand for all three products. In what order should these three products be produced if the company wishes to maximise its profit?

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter6: Activity-based, Variable, And Absorption Costing

Section: Chapter Questions

Problem 5PA: Medical Tape makes two products: Generic and Label. It estimates it will produce 423,694 units of...

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Question

How to do this? 14

Moss Ltd makes three products, Bgh, Rbo and Zyq. Unit costs and revenues
relating to the three products are as follows:
Bgh
Rbo
Zyq
Selling price
1,506
1,240
1,440
Direct materials
576
480
540
Direct labour
300
220
300
Variable overheads
240
180
180
Fixed overheads
324
216
316
Total costs
1,440
1,096
1,336
Profit per unit
66
144
104
All three products use the same material which costs £25 per kilogram but there is
not enough material to meet the demand for all three products. In what order
should these three products be produced if the company wishes to maximise its
profit?
Select one:
O a.
Best
2nd Best
3rd Best
Zyq
Bgh
Rbo
ob.
Best
2nd Best
3rd Best
Bgh
Rbo
Zyq
Best
2nd Best
3rd Best
Bgh
Zyq
Rbo
od.
Best
2nd Best
3rd Best
Zyq
Rbo
Bgh

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