Gemini plc manufactures four products using the same machinery. The following details relate to its products: Product A Product B Product C Product D £ per unit £ per unit £ per unit £ per unit Selling price 28 34 45 46 Direct material 6 7 9 7 Direct labour 5 5 10 10 Variable overhead 3 3 6 6 Fixed overhead * 8 8 16 16 Profit 6 11 4 7 Labour hours 1 1 2 2 Machine hours 4 3 4 5 Units Units Units Units Maximum demand per week 200 180 250 100 *Absorbed based on budgeted labour hours of 1000 per week. There is a maximum of 2000 machine hours available per week. Requirement: a) Determine the production plan which will maximize the weekly profit of Gemini plc and prepare a profit statement showing the profit your plan will yield.
Gemini plc manufactures four products using the same machinery. The following details relate to its products:
Product A Product B Product C Product D
£ per unit £ per unit £ per unit £ per unit
|
Selling price |
28 |
34 | 45 | 46 |
|
Direct material |
6 | 7 | 9 | 7 |
|
Direct labour |
5 | 5 | 10 | 10 |
|
Variable |
3 | 3 | 6 | 6 |
|
Fixed overhead * |
8 | 8 | 16 | 16 |
|
Profit |
6 | 11 | 4 | 7 |
|
Labour hours |
1 | 1 | 2 | 2 |
|
Machine hours |
4 | 3 | 4 | 5 |
| Units | Units | Units | Units | |
|
Maximum demand per week |
200 | 180 | 250 | 100 |
*Absorbed based on budgeted labour hours of 1000 per week.
There is a maximum of 2000 machine hours available per week.
Requirement:
a) Determine the production plan which will maximize the weekly profit of Gemini plc and prepare a profit statement showing the profit your plan will yield.
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