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QUESTION TWO [25] Brass Ltd produces two products, the X and the Y. Budgeted data relating to these products on a unit basis for
QUESTION TWO [25] Brass Ltd produces two products, the X and the Y. Budgeted data relating to these products on a unit basis for September are as follows: X Y Selling price R150 R100 Materials R80 R30 Commission R30 R20 Page 4 of 8 Each unit of product incurs costs of machining and assembly. The total capacity available for September is budgeted to be 700 machining and 1000 hours of assembly, the cost of this capacity being fixed at R7000 and R10 000 respectively for the month, whatever the level of usage made of it. The number of hours required in each of these departments to complete one unit of output is as follows: Department Machining Assembly X 1 2.5 Y 2 2 Under the terms of the South African government special controls have been introduced whereby the selling prices are fixed and the maximum permitted output of either product is 400 units. At the present controlled selling prices the demand for the product exceeds this considerably. Required: 2.1. Determine the number of units to be produced by Brass Ltd to maximize profit. The graph is not required however show all your workings. 2.1.1 Solving simultaneously, prove the accuracy of the answer in 2.1. 2.1.2. Calculate the profit earned for the month of September. (16) (5) (4) (No graphic images required)
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