Question
Fruit Ltd makes 3 types of products: Cherry, Blueberry and Strawberry. Extracts from the budget for the next year are as follows: Demand and production
Fruit Ltd makes 3 types of products: Cherry, Blueberry and Strawberry. Extracts from the budget for the next year are as follows:
Demand and production (units) Cherry Blueberry Strawberry
2,000 3,000 4,000
The following information is per unit of each product
Per unit | Cherry
| Blueberry
| Strawberry |
| |
Selling price | 174 | 340 | 308 | ||
Materials | 30 | 80 | 60 | ||
Labour | 40 | 100 | 80 | ||
Variable overhead | 24 | 60 | 48 |
Each product uses a standard material component called a seed. Seeds are 10 per unit.
The company expects the total fixed cost budget to be 120,000
Required:
Part (a).
It has now been realised that there will only be 30,000 seeds available next year.
Calculate the production plan that will maximise profit for Fruit Ltd for the next year. State what that plan will be (All workings must be shown)
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