Answered step by step
Verified Expert Solution
Question
1 Approved Answer
(5) 3. QLM company produces two products, A and B, the production costs of which are shown below: Particular A (Tk.) B (Tk.) Direct Materials
(5) 3. QLM company produces two products, A and B, the production costs of which are shown below: Particular A (Tk.) B (Tk.) Direct Materials 10 10 Direct Labor 5 9 Variable Overhead 5 9 Fixed Overhead 5 9 Fixed overhead is absorbed on the basis of direct labor cost. The products pass through two processes, Y and Z, with associated labor cost of Tk. 10 per direct labor hour in each. The direct labor time taken associated with the two products for these processes is shown below: Process Product A Product B Y 10 mins 20 mins 39 mins 15 mins z Selling prices are set by the market. The current market price for product A is Tk. 65 and that for B, Tk. 52. At these prices, the market will absorb as many units of A and B as the company can produce. The ability of the company to produce A and B is limited by the capacity to process the products through Y and Z. The company operates a two-shift system, giving 16 working hours per day. Process Z is a single process line and 2 hours in each shift will be downtime. Process Y can process two units simultaneously, although this doubles the requirement for direct labor. Process Y can operate for the full 16 hours each day. Requirement: What production plan should the company follow in order to maximize profits
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started