Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Gaermont Furniture is a chain of stores dedicated to the manufacture of fine furniture. In particular, Gaermont is dedicated to the manufacture of bedrooms, living

Gaermont Furniture is a chain of stores dedicated to the manufacture of fine furniture. In particular, Gaermont is dedicated to the manufacture of bedrooms, living rooms and dining rooms. The items that Gaermont considers offering to its customers over the next year are:

Rooms Dining Room Bedroom

Italy Living Room Rome Dining Room Azucena Bedroom

France Living Room Paris Dining Room Jazmin Bedroom

Morocco Living Room Oxford Dining Room Lirio Bedroom

Libya Living Room El Cairo Dining Room Clavell Bedroom

Egypt Living Room Beijing Dining Room

All types of furniture basically use cedar, walnut, oak and mahogany, in addition to some types of chipboard. Due to the quality of the woods they handle, the supply of this type of material is limited.

On the other hand, the requirements (in working hours) in the carpentry, upholstery and painting departments are presented in the following table (Table 1):

Product

Carpentry (hrs)

Upholstery (hrs)

Painting (hrs)

Demand

Max

Production

Max Production

per type of Room

Extra Cost Sale Price

Italia Living Room

10 16 2 500 1500 5000 $900 $13,900

France Living Room

7 15 4 500 2000 $1,200 $16,250

Morocco Living Room

8 12 4 500 1500 $1,400 $15,400

Libya Living Room

12 10 5 500 1500 $800 $15,500

Egypt Living Room

10 14 3 500 1500 $1,000 $16,500

Rome Dining Room

8 8 6 400 1100 4500 $500 $20,700

Paris Dining Room

12 9 4 400 1100 $600 $21,200

Oxford Dining Room

9 6 8 400 1100 $700 $22,600

El Cairo Dining Room

10 8 10 400 1100 $700 $24,700

Beijing Dining Room

12 10 9 400 700 $800 $28,900

Azucena Bedroom

15 0 12 300 1000 2500 $300 $28,000

Jazmin Bedroom

18 0 15 300 1000 $350 $28,850

Lirio Bedroom

12 0 12 300 1000 $250 $28,500

Clavell Bedroom

12 0 10 300 1000 $300 $24,500

Hour Wage

$60 $50 $45

Available people (per month)

45 35 32

Available hours per month (hrs)

200 200 200

Due to the different designs that each of these types of furniture have, it is sometimes more convenient to use a particular type of wood. In this way, the planks of the different woods used by these products, as well as the maximum availability of their supplier are presented in the following table (Table 2):

Product

Cedar (plank)

Walnut (plank)

Oak (plank)

Mahogany (plank)

Italia Living Room

2

1

0

0

France Living Room

1

1

2

0

Morocco Living Room

0

3

0

1

Libya Living Room

1

0

1

2

Egypt Living Room

0

2

1

1

Rome Dining Room

4

0

2

0

Paris Dining Room

0

1

1

4

Oxford Dining Room

0

0

2

5

El Cairo Dining Room

3

2

0

2

Beijing Dining Room

2

0

1

4

Azucena Bedroom

3

3

2

0

Jazmin Bedroom

4

4

0

0

Lirio Bedroom

0

0

3

5

Clavell Bedroom

0

3

0

4

Annual availability (planks)

15 000

12 000

12 000

16 000

Price per plank

$1,800

$1,400

$1,500

$2,000

The wooden planks are supplied by the company Beautiful Wood. The price of a cedar plank is $ 1800, the price of a walnut plank is $ 1400, the price of an oak plank is $ 1500, and the price of a mahogany plank is $ 2000.

An important clarification is that the wooden planks can be requested by pieces, that is, the company could request only those pieces that it considers necessary. Except for walnut, where it is necessary to buy all the pieces from the beginning of the year because this is an export material. So, the 12,000 units of walnut have already been requested.

If a walnut plank is not used during the year, then at the end of the year the plank can be sold for $800.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Auditing And Assurance Services

Authors: Timothy Louwers, Robert Ramsay, David Sinason, Jerry Strawser

2nd Edition

0073128244, 9780073128245

More Books

Students also viewed these Accounting questions