Contribution question help!!!!

alexp19740alexp19740 New MemberPosts: 16Registered
If anyone can help with this attached level 3 style question, it would be appreciated. It's really the bit where they are asking for the optical mix I am struggling with!

Alpha makes two products Tig and Tag, the info for the next month is as follows: Product Tig

Variable Costs:-

Material Costs (£400 per kilo) - 2400
Labour Cost - 400
Total variable cost 2800

Fixed costs:-

Production costs - 450
Admin Costs - 300
Total Fixed Costs - 750

Profit per unit - 450
Monthly Demand - 200

Product tag
Variable Costs:-
Material Costs (£400 per kilo) - 3000
Labour Cost - 600
Total variable cost - 3600
Fixed costs:-
Production costs - 450
Admin Costs - 300
Total Fixed Costs - 750

Profit per unit - 600
Monthly Demand - 300

a) Complete the following

The contribution per unit for

• Tig
• Tag

Total Contribution for:-

• Tig
• Tag
b) Optical production order for Tig and Tag
c) Optical production in units for Tig and Tag
d) Total contribution for Tig and Tag

Comments

  • Kelly7Kelly7 Well-Known Posts: 218Registered
    Ahh I have an answer for this somewhere I will try dig out my sheets later. X
  • SandyHoodSandyHood Font Of All Knowledge Posts: 2,034Registered, Moderator
    Alex

    I had to read your question twice (I put my specs on to check!)
    It's really the bit where they are asking for the optical mix I am struggling with!

    Once my eyes had seen your concern - I figured out that optimum or optimal mix is more likely to be what is needed.

    If this appears in an exam you sit it means:
    1. something is in short supply
    2. you need to recognise that some of the demand can not be met due to a limiting factor
    3. you need to schedule production to maximise the contribution you will get from the limiting factor
    You missed of the key fact in your posting: material availability is limited to 3,000 kgs

    I hope the attached word doc helps

    I am running a revision day on Sat 28 June in Bromsgrove for Financial Performance
    Please email me if you would like to attend
    [email protected]

    Sandy
    [email protected]
    www.sandyhood.com
  • alexp19740alexp19740 New Member Posts: 16Registered
    Many thanks guy, just realised I never replied to your kind response!
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