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It has three types of jeans all of which require the same production facilities. Estimates for the next month have been made as follows: Product

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It has three types of jeans all of which require the same production facilities. Estimates for the next month have been made as follows: Product 00 B C 50 $ Selling price per unit () 120 150 80 Variable Material Cost 35 40 per unit (E) Variable Labour Cost 25 30 16 per unit ( The share of Fixed 9 19 9 overhead per unit () Machine time per unit 5 hrs 7 hrs 4 hrs (hours) Monthly market 1,000 3,000 2,000 demand in units (units) The same machine is used to produce all three products and hence, fixed cost is not affected. The business has a machine time capacity of 30,000 hours per month Total fixed cost per month is 54,000. Required: A) With supported workings, show which combination of products to be produced to achieve the highest profit for the company. Clearly show your workings which show the no of units to be produced, total contribution and total profit/(Loss).( 30 marks)

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