Problem 03: Castries Ltd makes three products: Gimie: Gros and Petit. The budgeted production for three months is as follows:

No. of units

Gimie (1000), Gros (2000), Petit(800)

Selling price per unit

Gimie ($14),Gros ($25),Petit ($20)

Direct material per unit (litres)

Gimie (2.5),Gros (3.25), Petit (4)

Direct labor per unit

Gimie (0.5),Gros (3.25),Petit (0.6)

Direct material costs $2 per litre. Direct labor is paid at $10 per hour.

Fixed expenses are $10:000 Castries Ltd has been informed that only 10575 litres of material are available.

Required: revised budget that will produce the most profit from the available materials.

Problem 04: Castries Ltd h. been informed that supplies of material are not limiited: but only 3395 direct labor hours are available. All the other information is same as in problem 03.

Required: revised production budget that will produce the most profit from the available direct labor hours.