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Sir, am having problem with the ‘twice as many’..please explain..Thanks
A company makes two products, Reds and Blues. Total F.OHD to absorb during May are $60000, Budgeted Prod levels for Red for May are 10000 units.
Twice as many Blues as Reds are to be produced. Each Red takes 1 hour of labour and each Blue takes 0.25 hours.
OHDs are to be absorbed on a labour hour basis.
What is the OAR for each finished Blue?
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