Question: The management of your company is concerned at its inability to obtain enough fully trained labor to enable to meet its present budget projection.
|
Product:
|
Alpha Rs
|
Beta Rs
|
Gamma Rs
|
Total Rs
|
|
Variable Costs
|
|
|
|
|
|
Materials
|
6000
|
4000
|
5000
|
15000
|
|
Labor
|
9000
|
6000
|
12000
|
27000
|
|
Expenses
|
3000
|
2000
|
2000
|
7000
|
|
Allocated Fixed Cost
|
13000
|
8000
|
12000
|
33000
|
|
Total cost
|
31000
|
20000
|
31000
|
82000
|
|
Profit
|
8000
|
9000
|
2000
|
19000
|
|
Sales
|
39000
|
29000
|
33000
|
101000
|
The amount of labor likely to be available amounts to Rs 20,000. All of the variable labor is paid at the same hourly rate. You have been asked to prepare a statement ensuring that at least 50% of the budget sales are achieved for each product and the balance of labor used to produce the greatest profit.
Required: Prepare a statement showing the greatest profit available from the limited amount of labor available, within the constraint stated.