Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Question B1 TT Ltd has been manufacturing Bright and Dim lamps for over a decade and has an established market. Based on previous years' sales,
Question B1 TT Ltd has been manufacturing Bright and Dim lamps for over a decade and has an established market. Based on previous years' sales, the company has identified the market demand to be 120 Bright lamps and 100 Dim lamps per week. You have also been provided with the following information: Contribution margin per lamp Assembly hours for each lamp Bright Dim 30 40 58 Due to the company's re-allocation of resources, as from next week there will be only 920 assembly hours available for the production of these lamps. Required: a) Rank each lamp based on the contribution margin per assembly hour. (3 marks) b) Compute how many of each type of lamp should be produced in order to achieve the company's objective of maximising the production profit. (5 marks) c) The company's HR Department has informed the management of IT Ltd that the weekly assembly hours could be increased from 920 hours to 1,160 hours, for an additional cost of 1,200 per week. Calculate the number of extra Dim lamps that could be produced and hence assess the viability of adopting this option. (7 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