Question 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  production plan in order to maximize profitability. Indicate the total profit BB’s fabric hub will generate from your proposed plan.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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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  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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