MA79 Problem: CM Analysis and Scarce Resources - Paulie Limited

MA79 Problem: CM Analysis and Scarce Resources - Paulie Limited

The controller of Paulie Limited provided the following data regarding product A and B.A BSelling price $11.30$19.25Direct materials required per unit 2 kgs3 kgsDirect material cost per kilo $1.00$0.80Direct labour cost per hour $12.00$12.00Direct labour hours required per unit .25.75Machine hours required per unit 4.06.0Variable manufacturing overhead per unit $1.50$1.75Annual demand 4,0005,000 Other information is as follows:Total fixed selling & administrative costs are $ 19,380, allocated as follows:A: $ 7,880 B: 11,500Total fixed manufacturing overhead for the year $660,000Available machine hours 49,600Required:1. What is the optimum production quantity of Product A and B?