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Limiting factor
Product x. Y
$ $
Selling price p.u. 320. 280
Direct material($10
Per kg) 140. 65
Direct labour($5 per
Hour) 56. 78
Variable overhead. 28. 39Required
To comment on the priority which should be given to the products when
(i)unit sales are limited
(ii)sales in value are limited
(iii)material is scarceIm appreciated if anyone could help me to solve this asap. Thanks in advance!
The way i did it
(i)rank them based on contribution per unit
1.product y 2.product x
(ii)rank them by using selling price per unit divided by contribution per unit
1.product x 2. Product y
(Iii)rank them by using contribution per unit divided by materials required for one unit of good
1.product y 2. Product xPlease do comment to my answers. Tell me if im correct and please do not hesitate to rectify me if im wrong. Thanks!
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