ACCA PM · Chapter 6 · Question 3 of 10
Tau Co makes three products. Labour is limited to 12,000 hours next period. Product X: contribution $24 per unit, 3 labour hours per unit, maximum demand 2,000 units Product Y: contribution $30 per unit, 5 labour hours per unit, maximum demand 1,500 units Product Z: contribution $21 per unit, 2 labour hours per unit, maximum demand 1,000 units What is the maximum contribution that Tau Co can earn next period?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) $93,000
Explanation
Optimal plan: 1,000 Z, 2,000 X and 800 Y. Contribution = (1,000 x $21) + (2,000 x $24) + (800 x $30) = $21,000 + $48,000 + $24,000 = $93,000.
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