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MC Question 8
A company has the following production planned for the next four weeks. The figures reflect the full capacity level of operations. Planned output is equal to the maximum demand per product.
| Product | A $ per unit | B $ per unit | C $ per unit | D $ per unit |
|---|---|---|---|---|
| Selling price | 160 | 214 | 100 | 140 |
| Raw material cost | 24 | 56 | 22 | 40 |
| Direct labour cost | 66 | 88 | 33 | 22 |
| Variable overhead cost | 24 | 18 | 24 | 18 |
| Fixed overhead cost | 16 | 10 | 8 | 12 |
| Profit | 30 | 42 | 13 | 48 |
| Planned output | 300 | 125 | 240 | 400 |
| Direct labour hours per unit | 6 | 8 | 3 | 2 |
It has now been identified that labour hours available in the next four weeks will be limited to 4,000 hours.
In what order should the products be manufactured, assuming that the company wants to maximise profits in the next four weeks?
A. D, A, C, B
B. D, B, A, C
C. B, A, D, C
D. D, C, A, B