Aldana Producers Inc. manufactures three types of chips: Banana, Cassava and Plantain. For the quarter ending 30 June 2020, the following information is provided:

Limiting factor analysis

Details	Product A	Product B	Product C
	Banana chips	Cassava chips	Plantain chips
Revenue per unit	$800.00	$720.00	$640.00
Direct labour per unit	$200.00	$320.00	$240.00
Direct material per unit	$ 80.00	$120.00	$140.00
Total market demand	30,000	24,000	20,000
Machine hours per unit	0.50	0.25	0.40

There are 26,000 machine hours available during the quarter. Annual fixed costs are estimated at $12,480,000. Assume that fixed cost accrues evenly throughout the year.

Required:

(a) Calculate the optimal product mix for the quarter. [9 marks]

(b) Calculate the optimal profit for the quarter. [7 marks]

(c) Explain, giving two (2) examples, what a limiting factor is. [4 marks]

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