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Question 6. Cat ltd. makes two products, the Alan and the Cats. The selling price and resource requirements of both the products is as

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Question 6. Cat ltd. makes two products, the Alan and the Cats. The selling price and resource requirements of both the products is as follows: Products (values per unit) Selling Price Direct Material ($4 per kg) Direct Labour ($10 per hour) Fixed overheads absorbed Profit per Unit Alan $80 $20 $30 $10 $20 Cats $120 $28 $40 $20 $30 Market analysis shows that the maximum demand for products Alan and Cats during the coming month of November will be 600 units and 1,200 units respectively. At a recent meeting of the purchasing and production managers to discuss the company's production plans for December 2020, the following resource availability for December, is identified: Direct material 12,000 kg Direct labour 6,000 hours Requirement: a) Identify the limiting factor(s) in the above-mentioned scenario (LO3. BT Level: Apply) (5 Marks) b) Prepare an optimum production plan showing quantities of the products ONLY that can be produced with the resources available. Show all workings. (LO4. BT Level: Evaluate) (8 Marks) What will be the total profit maximizing amounts under the optimum production plan. (LO3. BT (6 Marks) Level: Apply)

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