Day: February 20, 2021

A company manufactures three products for which the following details (per unit) are available. 

product X £   product Y £   product Z £

sales value                                 12                    12                 22.50

direct material cost                  5                    5                   8      

labour cost                                   4                    6                  4.50

labour hours                                2                    0.8                3

If labour hours are restricted in supply, which order of priority should the company adopt when planning its production?

Select ONE answer:

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 3

1. Not correct
2. Not correct
3. Correct – Z = 22.50 – 12.50 = 10 CM,  Y = 12 – 10 = 2 CM
4. Not correct

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