A manufacturing enterprise manufactures ball-bearings using a special type of metal as raw material. The following budget was compiled for the coming year Units sold Raw materials Direct labour Variable overheads Fixed overheads Selling value SP 4 2.000 R Ball-bearings SP 5 2 000 12 000 5 000 1.000 2 000 24 000 R 6 000 3 000 600 1 200 16 000 SP 6 2000 R 15 000 6 000 1 200 2400 30 000 After the budget had been compiled, the full demand for raw materials could not be met. Due to the shortage of raw materials, only 75% of the materials required could be supplied. However, despite the shortage, the unit price of raw materials remains unaltered Required:
A manufacturing enterprise manufactures ball-bearings using a special type of metal as raw material. The following budget was compiled for the coming year Units sold Raw materials Direct labour Variable overheads Fixed overheads Selling value SP 4 2.000 R Ball-bearings SP 5 2 000 12 000 5 000 1.000 2 000 24 000 R 6 000 3 000 600 1 200 16 000 SP 6 2000 R 15 000 6 000 1 200 2400 30 000 After the budget had been compiled, the full demand for raw materials could not be met. Due to the shortage of raw materials, only 75% of the materials required could be supplied. However, despite the shortage, the unit price of raw materials remains unaltered Required:
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
Related questions
Question
Transcribed Image Text:A manufacturing enterprise manufactures ball-bearings using a special type of metal as raw
material. The following budget was compiled for the coming year.
Units sold
Raw materials
Direct labour
Variable overheads
Fixed overheads
Selling value
SP 4
2 000
R
Ball-bearings
SP 5
2 000
R
12 000
5 000
1.000
2 000
24 000
6 000
3 000
600
1 200
16 000
SP 6
2 000
R
15 000
6 000
1 200
2 400
30 000
After the budget had been compiled, the full demand for raw materials could not be met. Due
to the shortage of raw materials, only 75% of the materials required could be supplied.
However, despite the shortage, the unit price of raw materials remains unaltered.
Required:
h
5.1 Calculate the product mix that will result in the maximum profit for the enterprise given
the shortage of raw materials.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 4 steps with 3 images
Recommended textbooks for you
Practical Management Science
Operations Management
ISBN:
9781337406659
Author:
WINSTON, Wayne L.
Publisher:
Cengage,
Operations Management
Operations Management
ISBN:
9781259667473
Author:
William J Stevenson
Publisher:
McGraw-Hill Education
Operations and Supply Chain Management (Mcgraw-hi…
Operations Management
ISBN:
9781259666100
Author:
F. Robert Jacobs, Richard B Chase
Publisher:
McGraw-Hill Education
Practical Management Science
Operations Management
ISBN:
9781337406659
Author:
WINSTON, Wayne L.
Publisher:
Cengage,
Operations Management
Operations Management
ISBN:
9781259667473
Author:
William J Stevenson
Publisher:
McGraw-Hill Education
Operations and Supply Chain Management (Mcgraw-hi…
Operations Management
ISBN:
9781259666100
Author:
F. Robert Jacobs, Richard B Chase
Publisher:
McGraw-Hill Education
Purchasing and Supply Chain Management
Operations Management
ISBN:
9781285869681
Author:
Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson
Publisher:
Cengage Learning
Production and Operations Analysis, Seventh Editi…
Operations Management
ISBN:
9781478623069
Author:
Steven Nahmias, Tava Lennon Olsen
Publisher:
Waveland Press, Inc.