Question
(a) Osimesi Ltd produces three products, Solobo, Bosolo and Losobo, which have the following standard costs. Materials Solobo 20 grams per bottle Bosolo 35 grams
(a) Osimesi Ltd produces three products, Solobo, Bosolo and Losobo, which have the following standard costs.
Materials Solobo 20 grams per bottle Bosolo 35 grams per bottle Losobo 50 grams per bottle
Skilled Labour Solobo 30 minutes per bottle Bosolo 60 minutes per bottle Losobo 45 minutes per bottle
Unskilled Labour Solobo 60 minutes per bottle Bosolo 60 minutes per bottle Losobo 30 minutes per bottle
Additional Information
1. Because of the consistent Light out, the Human Resource Department laid off 30% of the skilled labour and 80% of the unskilled labour. This has put constraints on the rising demand and skilled labour is now in short supply limited to 20,000 hours. Unskilled labour of 32,000 can easily be obtained.
2. Projected sales are expected to be: Solobo 12,000 bottles Bosolo 15,000 bottles Losobo 10,000 bottles
3. i. Raw materials cost GH 0.20 a gram Ii. Skilled Labour is paid GH 20.00 an hour iii. Unskilled Labour GH 8.00 an hour iv. Selling price is 50% on mark-up
Required
(i) Calculate the optimum production that would maximize the limiting factor
(ii) What is the optimum production if skilled labour can easily be obtained and only a total of 30,000 bottles can be sold?
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