Sao Limited makes three products, all of which use the same machine, which is available for 60,000 hours per period.
The standard costs of the product, per unit, are
Product X Product Y Product Z
£ £ £
Direct materials 100 70 90
Direct labour
Machinists (£6 per hour)
30 18 54
Assemblers (£6 per hour)
36 40 42
Selling price per unit
215 147 220
Maximum demand (units)
3500 2000 5500
Fixed costs are £250,000 per period”
Required:
a) “Calculate the deficiency in machine hours for the next period.”