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Fong Co (profit maximising units)

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA PM Exams › Fong Co (profit maximising units)

  • This topic has 2 replies, 2 voices, and was last updated 5 years ago by John Moffat.
Viewing 3 posts - 1 through 3 (of 3 total)
  • Author
    Posts
  • December 15, 2020 at 11:21 am #600064
    jijon
    Participant
    • Topics: 18
    • Replies: 16
    • ☆

    Fong Co is involved in the processing of sheet metal into products A, B and C using three processes, pressing,stretching and rolling.
    Information about the three products per meter is as follows

    Product A Product B Product C

    Selling Price 70.0 60.0 70.0

    Variable costs
    Materials 3.0 2.5 10.0

    Labour 10·0 10.0 15.0

    Other Factory Costs are all fixed and total $18000000 per year.
    Raw material for the sheet metal is first pressed then stretched and finally rolled.The pressing process is the bottleneck

    Processing time per meter
    Product A Product B Product C
    Hours 0.5 0.5 0.4

    There are 225000hours of pressing time available each year.maximum demand for each product is 200000 metres per year.
    Note1:
    The finance director has just told that the company has employed sufficient labour to work 700000 hours per year,which is sufficient to meet maximum demand.Labour is paid 10$ pr hour.Due to agreements with the unions they pay the amount of labour in full

    QUESTION-How many metres of each product should be made per year in order to maximise profit?
    Sir how to do this??

    December 15, 2020 at 2:22 pm #600067
    jijon
    Participant
    • Topics: 18
    • Replies: 16
    • ☆

    Sir don’t bother I got it .Sorry

    December 15, 2020 at 3:13 pm #600073
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54835
    • ☆☆☆☆☆

    I am pleased that you have got it 🙂

  • Author
    Posts
Viewing 3 posts - 1 through 3 (of 3 total)
  • The topic ‘Fong Co (profit maximising units)’ is closed to new replies.

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