Question
The Chineke Group of Company manufactures two products, namely product B and product P, and provides you with the following information: Prod. B Prod. P
The Chineke Group of Company manufactures two products, namely product B and product P, and provides you with the following information:
| Prod. B | Prod. P |
Selling price per unit | 80.00 | 50.00 |
Less cost of sales: |
|
|
Direct material A @ R5.00 per kg | 15.00 | 10.00 |
Direct material B @ R4.00 per kg | 8.00 | 12.00 |
Direct labour @ R6.00 per hour | 12.00 | 6.00 |
Variable manufacturing overhead @ R5.00 per labour hour | 10.00 | 5.00 |
Fixed manufacturing overhead per unit | 5.00 | 5.00 |
Gross profit | 30.00 | 12.00 |
Less sales & administrative costs: |
|
|
Variable | 6.00 | 4.00 |
Fixed | 10.00 | 5.00 |
Net profit per unit | 14.00 | 3.00 |
Take note of the following constraints:
Material A available 360 kg
Material B available 360 kg
Labour hours available 360 hours
Sales units:
Product B: a maximum of 90 and at least 20 units
Product P: a maximum of 80 and at least 10 units
Required:
Calculate the optimal production size for product B, using the graphical method.
NB: You are not required to enter the unit or currency symbol.
Provide your answer in numerical form, with no spaces in between. For example: 1000.
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