Question 1 (25 marks) The Dolly Company ("DolyCo") produces three types of dolls that they sell to the local market. The three dolls namely Pony, Girly and Noku are manufactured from the same materials and use the same grades of labour. Details of the standard cost per doll is given as follows: Direct Materials Skilled Direct labour Semi Skilled Direct labour Noku N$ Pony N$ Girly N$ 60.36 3.14 72.20 19.70 14.45 6.57 3.95 11.82 35.45 Skilled labour is paid at a rate of N$13.13 per hour and semi-skilled labour is paid at N$7.88 per hour. Fixed costs per year amount to N$ 1 575 000. The forecast sales for the forthcoming period are as follows: Pony Girly Noku Sales Units 24 000 Price per unit 147.00 42 000 81.38 22 500 133.88 In a recent management meeting, it emerged that another company that recently opened is using the same skills that DollyCo is using. As a result, some employees have left DollyCo. For the forthcoming period, only 75 000 hours of skilled labour will be available and only 180 000 hours of semi-skilled labor will be available. These estimates have already considered the possibility of overtime and these are the maximum labour times available. Required 1.1 1.2 Total Assuming DollyCo want to maximise profits for the forth coming period, determine the production mix that will enable them to realise this goal. Using your production mix determined in 1.1 above, prepare a profit statement for the forth coming period. Marks Sub- total Total 20 20 5 25 25 25