Buraaq Corporation produces three products: Alpha, Beta and Gamma. The following information is available: The wage rate for direct labour is PKRXX per hour. • The variable overhead relates to machinery costs and is PKR 0.50 per machine hour. Information per unit Maximum demand in units Variable overhead (PKR) Alpha 10,000 Beta Gamma 11, 000 1.5 8, 000 0.5 2 Material (PKR) 3.5 4 6 Direct labour (PKR) Selling price (PKR) Direct labour (hours) 4 4 10 15 20 0.4 hours 0.4 hours 0.5 hours Required: • Calculate the contribution per unit for each of the products Alpha, Beta and Gamma. • Calculate the total contribution earned by Buraaq Corporation if the company makes enough of each product to meet the maximum demand for each product. • Calculate the total number of machine hours and labour hours needed to produce the maximum demand of all three products. • Calculate the contribution PER MACHINE hour for each product. • If Buraaq Corporation is limited to 49,000 hours of machine time, devise an optimal production plan which would maximize total contribution.

Buraaq Corporation produces three products: Alpha, Beta and Gamma. The following information is available: The wage rate for direct labour is PKRXX per hour. • The variable overhead relates to machinery costs and is PKR 0.50 per machine hour. Information per unit Maximum demand in units Variable overhead (PKR) Alpha 10,000 Beta Gamma 11, 000 1.5 8, 000 0.5 2 Material (PKR) 3.5 4 6 Direct labour (PKR) Selling price (PKR) Direct labour (hours) 4 4 10 15 20 0.4 hours 0.4 hours 0.5 hours Required: • Calculate the contribution per unit for each of the products Alpha, Beta and Gamma. • Calculate the total contribution earned by Buraaq Corporation if the company makes enough of each product to meet the maximum demand for each product. • Calculate the total number of machine hours and labour hours needed to produce the maximum demand of all three products. • Calculate the contribution PER MACHINE hour for each product. • If Buraaq Corporation is limited to 49,000 hours of machine time, devise an optimal production plan which would maximize total contribution.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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