Emery Ltd manufactures three models of garden greenhouse:
•standard model
•economy model
•deluxe model
All three types include the same type of aluminium. The aluminium costs £5 per square metre. The following is a unit cost statement for each type:
|
Standard |
Economy |
Deluxe |
|
|
Selling price |
80 |
55 |
120 |
|
Direct materials: |
|||
|
Glass |
11 |
7 |
15 |
|
Aluminium |
12 |
10 |
25 |
|
Direct labour |
15 |
8 |
20 |
Sales for May 2015 are expected to be:
•standard model: 1,000 greenhouses
•economy model: 1,200 greenhouses
•deluxe model: 1,000 greenhouses.
Owing to a shortage of aluminium, the suppliers have stated that they can only deliver 6,000 m2to cover production during May 2015. This means that the management will have to alter their production plans, which will influence the level of sales of the various types of greenhouse. All greenhouses produced in each month are sold.
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