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Question 4 Fruit Ltd makes 3 types of products: Cherry, Blueberry and Strawberry. Extracts from the budget for the next year are as follows:
Question 4 Fruit Ltd makes 3 types of products: Cherry, Blueberry and Strawberry. Extracts from the budget for the next year are as follows: Demand and production (units) Cherry 2,000 Blueberry Strawberry 3,000 4,000 The following information is per unit of each product Per unit Cherry Blueberry Strawberry AED AED AED Selling price 174 340 308 Materials 30 80 60 Labour 40 40 100 80 Variable overhead 24 60 48 Each product uses a standard material component called a seed. Seeds are 10 AED per unit. The company expects the total fixed cost budget to be AED 120,000 Required: Part (a). It has now been realised that there will only be 35,000 seeds available next year. Calculate the production plan that will maximise profit for Fruit Ltd for the next year. State what that plan will be (All workings must be shown) (15 marks)
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