ACCA PM · Chapter 6 · Question 2 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 How many units of product Y will be made in the optimal plan?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: A) 800 units
Explanation
Make Z first: 1,000 units x 2 hours = 2,000 hours. Then X: 2,000 units x 3 hours = 6,000 hours. Hours remaining = 12,000 - 2,000 - 6,000 = 4,000. Units of Y = 4,000 / 5 = 800 units. Omitting Z and making only X before Y would wrongly leave 6,000 hours for 1,200 units of Y.
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