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CONFIDENTIAL QUESTION 9 (13 marks; 23.4 minutes) Cardin Company produces two types of gears: Model 12 and Model 15. Market conditions limit the number
CONFIDENTIAL QUESTION 9 (13 marks; 23.4 minutes) Cardin Company produces two types of gears: Model 12 and Model 15. Market conditions limit the number of each gear that can be sold. For Model 12, no more than 15 000 units can be sold, and for Model 15, no more than 40 000 units. Each gear must be notched by a special machine. Cardin owns eight machines that together provide 40 000 hours of machine time per year. Each unit of Model 12 requires two hours of machine time, and each unit of Model 15 requires one half-hour of machine time. The unit contribution for Model 12 is R30 and for Model 15 is R15. Required: 9.1 Calculate the product mix that will maximise Cardin's total contribution. (10) 9.2 Calculate the total contribution for the product mix calculated in 9.1 above. (3)
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