14.14 Juniper Jefferson Ltd manufactures two models of baby buggy: the deluxe and the super deluxe. There is currently a shortage of the special grade of aluminium required for the buggy frame. This is unlikely to be a long-term problem, but it will affect production over the next three months. The cost and selling price information for each model is as follows:

Deluxe Super-deluxe

£ £

Selling price 150.00 165.00 Variable cost of raw materials Aluminium (at £8.50 per kg) 38.25 42.50 Other raw materials 12.50 15.00 Variable cost of labour 13.65 15.60 The company has 350 kg of aluminium in stock and expects to be able to buy no more than a further 1,000 kg per month for the next three months. You are required to:

i) Calculate the contribution per unit of limiting factor for both models of buggy.

ii) Advise the directors on the production plan they should follow, assuming that:

a) demand for the deluxe will be 800 units over the next three months, with demand for the super-deluxe at 300 units over the same period; or

b) demand for the deluxe will be 600 units over the next three months, with demand for the super-deluxe at 400 units over the same period.