A company makes three products X, Y and Z for which details per unit are as follows:

selling price $18 $35 $50
direct material costs $4 $5 $5
direct labour hours 0.5 2 2.5

The direct labour rate is $8.00 per hour. Direct labour hours are limited.

In which order should the products be ranked to achieve the maximum profit with the available labour hours?

This question tests Cost Accounting in A-Level Accounting (syllabus code 9706). It is worth 1 mark.

This question appeared in the Cambridge A-Level Accounting May/June 2024 examination, Paper 1 Variant 2 (9706_s24_qp_12.pdf).

Question

A company makes three products X, Y and Z for which details per unit are as follows:

selling price	$18	$35	$50
direct material costs	$4	$5	$5
direct labour hours	0.5	2	2.5

The direct labour rate is $8.00 per hour. Direct labour hours are limited.

In which order should the products be ranked to achieve the maximum profit with the available labour hours?

Oracle Prep · Accepted Answer

The correct answer is D: first	next	last
X	Z	Y.

✓ Correct Answer