Industrial Fitments Ltd produce three types of shelving – ‘Factory’, ‘Stores’ and ‘Office’, which…
Industrial Fitments Ltd produce three types of shelving – 'Factory', 'Stores' and 'Office', which are made from the same basic material. mild steel. which costs £1 per square metre. The standard unit cost of the three products are as follows:
Sales expectations for the forthcoming month are:
Owing to an industrial dispute, suppliers of mild steel have intimated that they will be able to supply only 2,500 square metres during the month.
You are required to:
(a) prepare a statement which will enable you to advise management on the most profitable production pattern to pursue;
(b) mention briefly the matters which should receive the attention of management when confronted with the type of situation described above.