MDCL Sample assesemnt 2 Q8a

Spinka123

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

amandagarratt

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

Spinka123

Thank you Amanda! You are a star