Dineo has recently set up a small business, which manufactures three different types of chairs to customer order. Each type is produced in a single batch per week and dispatched as individual items. The size of the batch is determined by the weekly customer order. The three different types of chairs are known as the Comfort, the Recliner and the Kgweetsa. The Comfort is a fully leather-upholstered chair and is the most expensive of the range. The Recliner is the middle of the range chair and has a comfortable leather seat. The cheapest of the range, the Kgweetsa, is purely a wooden chair, but Dineo feels it has great potential and hopes it will provide at least 50% of the sales revenue. Dineo has produced figures for the past month, July 2022 which is considered a normal month in terms of costs:

QUESTION 1 [25 MARKS] Dineo has recently set up a small business, which manufactures three different types of chairs to customer order. Each type is produced in a single batch per week and dispatched as individual items. The size of the batch is determined by the weekly customer order. The three different types of chairs are known as the Comfort, the Recliner and the Kgweetsa. The Comfort is a fully leather-upholstered chair and is the most expensive of the range. The Recliner is the middle of the range chair and has a comfortable leather seat. The cheapest of the range, the Kgweetsa, is purely a wooden chair, but Dineo feels it has great potential and hopes it will provide at least 50% of the sales revenue. Dineo has produced figures for the past month, July 2022 which is considered a normal month in terms of costs: P P Sales revenue Material costs Labour costs Overheads Profit 17,250 27,600 34,500 79,800 79,350 450 Comfort Recliner Kgweetsa Units produced and sold during July 30 120 150 P P P Selling price per chair Less: Costs per chair Material Labour 395 85 120 285 60 100 225 50 80