Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Gyamfi Fruit Processing Ltd (GFPL) is a small company which manufactures and sells three (3) different natural fruit juices- Orapine, Cocopine, and Mangopine. All the
Gyamfi Fruit Processing Ltd (GFPL) is a small company which manufactures and sells three (3) different natural fruit juices- Orapine, Cocopine, and Mangopine. All the 3 products use a specialized raw material, 'golden pineapple, and the manufacturing process of the products require the same skilled labour. GFPL management is planning its production schedule for July 2019. The planning process is complicated because there are labor shortages in the community and the yield of golden pineapple are usually low in July. Management, therefore, expects that in July 6,000kg 'golden pineapple will be available from suppliers and skilled labor hours will be limited to 5,500 hours. GFPL management practices a just-in-time system, so it barely keeps inventory in store. Management estimates the cost per kilogram of 'golden pineapple to GH4 and the wage rate per hour to be GH8. The following expected relevant data for July has also been assembled by management; Orapine Cocopine Mangopine Selling price per bottle (GH) 6.00 7.50 10.00 Contribution margin ratio 0.20 0.20 0.20 Component of variable cost per bottle Raw material cost 50% 40% 50% Labour hour cost 50% 60% 40% Expected sales demand (bottles) 5,000 3,000 4,000 Required; What production and sales schedule (mix) should GFPL select to maximize its cedi profit
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started