Question B3 Darts Manufacturing Ltd manufactures three products Set 1, Set 2 and Set 3, using different quantities of th

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Question B3 Darts Manufacturing Ltd Manufactures Three Products Set 1 Set 2 And Set 3 Using Different Quantities Of Th 1 (74.05 KiB) Viewed 56 times

Question B3 Darts Manufacturing Ltd manufactures three products Set 1, Set 2 and Set 3, using different quantities of the same materials, one of which is nickel. For costing and reporting purposes, a 'unit' or 'set' is a batch of 100 items. Information about Darts' main three products is as follows: Set 1 70 Set 2 60 Set 3 144 32 Selling price £ per unit Cost (£) per unit: Direct Material, Nickel, at £4 per kg Special component Tungsten Direct Labour, at £4 per hour Variable overhead Total variable cost 32 24 0 10 6 20 0 12 8 40 14 12 90 40 1,750 units 3,100 units 4,000 units Weekly demand The quantity of output for component 'Tungsten' will relate directly to that of Set 3. Darts has established that it can only rely on 30,000 hours of labour, and only obtain 55,000 kgs of nickel per week for the foreseeable future. (a) Establish whether labour hours or the material Nickel is the limiting factor for [10] Darts Ltd. (b) Prepare calculations to show optimum weekly output and maximum [10] contribution, based on your decision for requirement (a).