BB’s fabrics hub produces three brands of fabrics in Ghana. Hitarget GTP Wooden Machine hours 10 12 14 GHS GHS GHS Cotton@ GHS 50/kg 700 600 500 Direct wage @75/kg 900 600 300 Variable Overheads 200 400 300 1,800 1,600 1,100 Selling Price 2,400 2,100 2,100 Sales demand for the year is fixed as follows: Hitarget Maximum 4,000 yards GTP Maximum 6,000 yards Wooden Maximum 1,500 yards In order to remain competitive in the market, BB’s fabric hub must produce a minimum of 1000 yards of Hitarget. The supply of cotton is unlimited but the machine hours are limited to 200,000 and direct labor hours to 50,000. required: As an MBA Accounting and Finance student of UPSA, you are required to present a report indicating your proposed production plan in order to maximize profitability. Indicate the total profit BB’s fabric hub will generate from your proposed plan.
BB’s fabrics hub produces three brands of fabrics in Ghana.
|
|
Hitarget |
GTP |
Wooden |
|
Machine hours |
10 |
12 |
14 |
|
|
GHS |
GHS |
GHS |
|
Cotton@ GHS 50/kg |
700 |
600 |
500 |
|
Direct wage @75/kg |
900 |
600 |
300 |
|
Variable |
200 |
400 |
300 |
|
|
1,800 |
1,600 |
1,100 |
|
|
|
|
|
|
Selling Price |
2,400 |
2,100 |
2,100 |
Sales demand for the year is fixed as follows:
|
Hitarget |
Maximum |
4,000 yards |
|
GTP |
Maximum |
6,000 yards |
|
Wooden |
Maximum |
1,500 yards |
In order to remain competitive in the market, BB’s fabric hub must produce a minimum of 1000 yards of Hitarget. The supply of cotton is unlimited but the machine hours are limited to 200,000 and direct labor hours to 50,000.
required:
As an MBA Accounting and Finance student of UPSA, you are required to present a report indicating your proposed production plan in order to maximize profitability. Indicate the total profit BB’s fabric hub will generate from your proposed plan.
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