MDCL Sample assesemnt 2 Q8a

Does anyone know how to calculate the £1785, the maximum profit resulting from the optimal production plan ?

Comments

  • amandagarrattamandagarratt WidnesPosts: 10Registered, Tutor
    Hi

    I had the same query when I first did it. You have to keep the fixed cost based on the original sales demand and don't change it based on the revised production plan.
    So calculations would be:

    X = Contribution (500) - Fixed costs (175) = 325
    Y = Contribution (960) - Fixed costs (300) = 660
    Z = Contribution (1080) - Fixed costs (280) = 800
    Total = 1785

    Hope this makes sense :)

    Amanda
  • Spinka123Spinka123 Posts: 3Registered
    Thank you Amanda! You are a star :)
    amandagarratt
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