Creative Sdn Bhd. produces two types of lamps, classic and decorative. The detailed information on the products are as follows: Classic Decorative Selling Price 85 130 Variable cost per unit 42 80 Hours required on the special machine 0.2 0.5 Additional information: 1. Each lamp must spend time on a special machine. The firm owns four machines that together provide 8,000 hours of machine time per year. 2. The demand for classic lights is 20,000 and for decorative lamps is 15,000. 3. To optimise the profit with the limited machine that they have, management needs to decide the number of units to be produced for each type of lamp. Required: Based on the current capacity:
Creative Sdn Bhd. produces two types of lamps, classic and decorative. The detailed information on the products are as follows:
| Classic | Decorative | |
| Selling Price | 85 | 130 |
| Variable cost per unit | 42 | 80 |
| Hours required on the special machine | 0.2 | 0.5 |
Additional information:
1. Each lamp must spend time on a special machine. The firm owns four machines that together provide 8,000 hours of machine time per year.
2. The demand for classic lights is 20,000 and for decorative lamps is 15,000.
3. To optimise the profit with the limited machine that they have, management needs to decide the number of units to be produced for each type of lamp.
Required:
Based on the current capacity:
a) Calculate the number of units to be produced for each type of product.
b) Calculate the amount of both lamps if there is no limit for lamps demand and the company is able to sell all lamps produced.
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