A firm is engaged in producing two products: PI and P2•

The relevant data are given here:

Fixed overhead= Rs 2,85,000 per annum.
No. of employees in the three departments: DepttA = 20; DepttB = 15; Deptt C= 18 No. of hours/employee/week= 40 in each department No. of weeks per annum= 50.

(a) Formulate the given problem as a linear programming problem, and solve graphically to determine (i) the product mix as will maximise the contribution margin of the firm.
(ii) the amount of contribution margin and profit obtainable per Year.

(b) From the graph, do You observe any constraint that is redundant? Which one, if Yes?

Transcribed Image Text:

Per Unit: (i) Selling price (ii) Direct materials (iii) Direct wages: Product P Rs 200 Rs 45 Product P Rs 240 Rs 50 Deptt A Deptt B Deptt C (iv) Variable overheads 8 hrs @ Rs 2/hr 10 hrs @ Rs 2.25/hr 4 hrs @ Rs 2.5/hr Rs 6.50 10 hrs @ Rs 2/hr 6 hrs @ Rs 2.25/hr 12 hrs @ Rs 2.5/hr Rs 11.50