haol uestion Wanyemba (Pty) Ltd manufactures camping equipment Management is now considering the introduction of a six-sleeper tent to complement its existing two-sleeper tent. The organisation believes that it can sell all that it produces, but production is limited by labour hours and machine hour manufacturing constraints. Preliminary analysis has shown the following: Manufacturing constraints Wanyemba (Pty) Ltd is limited to 52 500 labour hours in the cutting cost pool and 75 000 machine hours in the make-up cost pool per annum Budgeted variable costs per unit and selling price per unit 2-sleeper (NS) 6-sleeper (NS) Materials 300 1 150 Labour 100 700 Production overheads 100 150 300 100 Selling costs Selling price Fixed production overheads 1 400 3 000 Wanyemba will allocate the fixed production overheads to the two products using an activity-based costing (ABC) system Total budgeted fixed production overhead cost for each cost pool for the forthcoming year is as follows: Overheads per annum (NS) Quality control 500 000 Cutting 4 000 000 Purchasing 400 000 Make-up 6 000 000 The two products will require the following per single unit of production: Cost pool 2-sleeper 6-sleeper Quality control 20 inspections 35 inspections Cutting 120 labour minutes 360 labour minutes Purchasing 5 orders 6 orders Make-up 4 machine hours 8 machine hours Fixed administration and selling expenses The total anticipated cost for Wanyemba (Pty) Ltd is N$10 000 000 per annum. Required: Calculate the total contribution that will be generated by Wanyemba Cithe optimum production plan for 2-sleeper is implemented Solve the optimal plan using the algebraic method of linear programming. NB: You are not required to enter the unit or currency symbol haol uestion Wanyemba (Pty) Ltd manufactures camping equipment Management is now considering the introduction of a six-sleeper tent to complement its existing two-sleeper tent. The organisation believes that it can sell all that it produces, but production is limited by labour hours and machine hour manufacturing constraints. Preliminary analysis has shown the following: Manufacturing constraints Wanyemba (Pty) Ltd is limited to 52 500 labour hours in the cutting cost pool and 75 000 machine hours in the make-up cost pool per annum Budgeted variable costs per unit and selling price per unit 2-sleeper (NS) 6-sleeper (NS) Materials 300 1 150 Labour 100 700 Production overheads 100 150 300 100 Selling costs Selling price Fixed production overheads 1 400 3 000 Wanyemba will allocate the fixed production overheads to the two products using an activity-based costing (ABC) system Total budgeted fixed production overhead cost for each cost pool for the forthcoming year is as follows: Overheads per annum (NS) Quality control 500 000 Cutting 4 000 000 Purchasing 400 000 Make-up 6 000 000 The two products will require the following per single unit of production: Cost pool 2-sleeper 6-sleeper Quality control 20 inspections 35 inspections Cutting 120 labour minutes 360 labour minutes Purchasing 5 orders 6 orders Make-up 4 machine hours 8 machine hours Fixed administration and selling expenses The total anticipated cost for Wanyemba (Pty) Ltd is N$10 000 000 per annum. Required: Calculate the total contribution that will be generated by Wanyemba Cithe optimum production plan for 2-sleeper is implemented Solve the optimal plan using the algebraic method of linear programming. NB: You are not required to enter the unit or currency symbol
