AAT Practise assessment 1 question 1.7 Optimal productiom

Hello,

Can someone please explain to me how would you calculate the optimal production from the below information, I can't get my head around this. Thank you in advance


Per unit Jackal £ Hyena £
Direct Materials at £5 per kg 10 15
Direct Labour at £6 per hour 6 12
Variable overheads 2 4
Selling price 25 40

Sales demand 5,000 11,000

materials are limited to 55,000 kg and labour hours to 20,000



Comments

  • dumutrobadumutroba Posts: 265AAT Student, AATQB
    edited January 18
    You need to find which is the limitrd factor

    For materials

    Jackal is 10/5=2 kg and Hyena 15/5=3kg
    J. have sales demand 5000units x 2kg=10000kg
    H. Is 11000x3kg=33000kg
    This mean we will need 43000kg to fulfil the sales demand and we are told that we have in disposal 55000kg, so this is ok

    For labour
    J takes 6/6=1 h and H takes 12/6=2h
    Therfore for J we have 5000x1=5000h and H is 11000x2=22000h, total of 27000h, which is 7000h more of what we have as a limit, therefore this is our limited factor
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  • jmhjmh Posts: 42Registered
    thank you for your help
  • dumutrobadumutroba Posts: 265AAT Student, AATQB
    You are welcome
    AAT Level 2. 2018 Distinction
    AAT Level 3. 2018 Distinction
    AAT Level 4. 2019 FSLC 100% MABU 93% MADC 82% PDSY 80%
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