Answered step by step
Verified Expert Solution
Question
1 Approved Answer
QUESTION 2 CharTed Ltd manufactures three traditional drinks - Asana, Sobolo and Brukina. The company expects the sales demand for Asana, Sobolo and Brukina in
QUESTION 2 CharTed Ltd manufactures three traditional drinks - Asana, Sobolo and Brukina. The company expects the sales demand for Asana, Sobolo and Brukina in March 2018 to be 10,000 bottles, 8,000 bottles and 11,000 bottles respectively. All the three drinks use the same raw materials and the same type of labour. Per the bottle selling price and the resource requirement per bottle of each of these traditional drinks are given as follows: Asana Sobolo Brukina Selling price per bottle (Ghe) 16 Per bottle requirement of raw materials (kg) Direct labour required per bottle (hours) 18 14 3 4.5 2 6 2 8 The following data were also made available by the cost and management accountant a. One kilogram of the raw materials costs GH2 and the cost of the direct labour per hour is GH1. b. CharTed Ltd has an existing inventory of 4,000 bottles for Sobolo and 5,000 bottles for Brukina which will be used up to meet the sales demand for March 2018. c. In March 2018, the company has restricted the supply of the resources for the products so only 66,000kg of raw materials and 96,000 hours of are available for supply. d. The company expects the fixed cost for the month to be GH60,000. Required Determine the production and sales mix that will maximise the Char Ted Ltd's profit. Total = 10 marks
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started