Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Question _fnur Aqua Aztec (AA) is a manufacturer of stand-up paddleboards (SUPs) and produces four different models: Beast, Monster, Vapor and Coral. In addition to
Question _fnur Aqua Aztec (AA) is a manufacturer of stand-up paddleboards (SUPs) and produces four different models: Beast, Monster, Vapor and Coral. In addition to the four models of SUPs, AA also produces a maintenance kit for the SUPs. Demand for the SUPs is increasing and management has requested your help in determining the best sales and production mix for the next year. The company has provided you with the following data: Demand Selling Price per Direct Direct Product next year unit materials labour Beast 4,600 $750.00 $525.00 $84.00 Monster 5,900 $660.00 $520.00 $60.00 Vapor 6,200 $620.00 $425.00 $86.40 Coral 6,650 $550.00 $415.00 $72.00 Maintenance Kit 75,000 $150.00 $62.00 $43.20 The following additional information is available: - The compaan plant has a capacity of 200,000 direct labour hours per year on a single-shift basis. Due to the tight labour market, this cannot be increased. The company's current employees and equipment can produce all ve products. - The direct labour rate is $24.00 per hou r; this rate is expected to remain unchanged during the coming year. - Fixed costs total $2,580,000 per year. Variable overhead costs are $16.00 per direct labour-hour. - _A pi the company's nonman ufacturing costs are xed. - The company's present inventory of nished products a_re negligible and can be ignored. REQUIRED: a. Determine whether Aqua Aztec has sufcient labour hours to satisfy demand for next year. Show all workings and explain your answer. b. Determine the production plan for the company that maximises its income. Show all workings and ex plain your
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