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Loone]:r Industries is a chemical company which produces and sells three cleaning products - Aqua-Clean, Micro-Clean and Green-Clean - to business customers, mostly to the

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Loone]:r Industries is a chemical company which produces and sells three cleaning products - Aqua-Clean, Micro-Clean and Green-Clean - to business customers, mostly to the cleaning departments of factories and large ofce buildings. Each product passes through four production departments, where both labour and machine times are applied. The machine and labour skills required in each department are so specialized that neither machines nor labour can be switched from one department to another. Leone}!r Industries' sales department believes that next month's demand will be 1000 units of Aqua-Clean, 800 units of Micro-Clean and 2000 units of Green-Clean. Their selling prices are $11-12, $292 and $388 respectively. Cost data for next month is estimated, as follows: ....- .-. Clean Directmaterial Direct labour Variable overhead 50 Fixed overhead Variable sellin. - uenses Leone},Jr Industries' management is planning its production schedule for the next month. The planning is complicated, because there are labour shortages in the community and some machines will be inactive for several weeks due to necessary repairs and maintenance. Management has assembled the following information regarding available machine and labour time by department: _--_--_ Available machine capacity in 12,000 12,000 9,000 12,000 machine hours Available labour in direct labour 14,000 18,000 13,125 10,200 hours Machine hours and direct labour hours required per unit of each product are as follows: Question 4 (cont'd) Product Aqua-Clean Micro-Clean Green-Clean Department A: Direct labour hours 4 2 4 Department A: Direct machine 2 2 4 hours Department B: Direct labour hours 6 4 4 Department B: Direct machine 2 N hours Department C: Direct labour hours 6 Department C: Direct machine 4 2 hours Department D: Direct labour hours 2 2 Department D: Direct machine 4 4 2 hours

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