Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Zek Ltd assembles heavy industrial switchboxes. Hitherto, Zek Ltd has assembled only onetype, but recently a decision was made to expand the product range into

Zek Ltd assembles heavy industrial switchboxes. Hitherto, Zek Ltd has assembled only onetype, but recently a decision was made to expand the product range into two types. Thefollowing data pertains to each switchbox:Existing product Z686(R) New product Z797(R)Selling price per unit 80006800Variable costs per unit:- Direct materials 60005600- Direct labour 500400- Manufacturing overhead 500200Specific fixed costs per day 100005000Zek Ltds total general fixed costs per day amount to R27000.The organisation operates its factory 24 hours per day and this equates to one operatingcycle. Each switchbox goes through two processes, namely assembly and testing. Thenumber of units which can be assembled or tested in one operating cycle is as follows:Assemble TestZ68626Z79763Zek Ltd is limited to 600 assembly hours and 400 testing hours in one operating cycle.Management is anxious to ascertain the following, but are unsure as to how to determinethese factors:1. The most profitable daily (that is, in one operating cycle) production combination.2. The minimum number of units which should be produced in one operating cycle ifZek Ltd wishes to achieve a total daily profit of R10000.Required1.1 Explain why linear programming is appropriate in determining the optimal productionsolution for Zek Ltd.(3)1.2 Outline the steps to be undertaken when using the graphic linear programmingmethod. (5)1.3 Determine, using graphic linear programming, the production combination for Zek Ltdwhich maximises daily profit. (Draw the graph in your answer book. Ensure that youlabel the graph comprehensively and clearly.)(17)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Students also viewed these Accounting questions

Question

b. Why were these values considered important?

Answered: 1 week ago