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Fountain of Life (FOL) is a business offering massage therapy and has a line of three services it performs for its clients: facial pamper, full
Fountain of Life (FOL) is a business offering massage therapy and has a line of three services it performs for its clients: facial pamper, full Body massage and foot massage for its patients. It hires masseurs locally to provide these services. Product Facial Pamper Full Body massage Foot massage Estimated maximum demand for one year 10,000 2,000 3,000 Average therapy fee (ZMW) 3,500 1,750 2,250 Masseur cost per hour(paid ZMW 500 per hour) 1,500 250 750 Variable cost per operation (ZMW) 620 150 340 The fixed overhead is incurred at ZMW 780,250.00 a month. Unfortunately due to limited availability of skilled personnel FoL can only currently employ 20 masseurs working a 42 week year, performing therapy up to a maximum of 40 hours a week. Required: i) Calculate the number of therapy sessions that FoL must perform each year to maximize contribution. (15 Marks) ii) Calculate the amount of profit to be made by FoL based on the number of (10 Marks) operation in (i)
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