Zek Ltd assembles heavy industrial switchboxes. Hitherto, Zek Ltd has assembled only onetype, but recently a decision was made to expand the product range into two types. Thefollowing data pertains to each switchbox:Existing product Z 686 (R) New product Z797 (R)Selling price per unit 8 000 6 800 Variable costs per unit: - Direct materials 6 000 5 600 - Direct labour 500 400 - Manufacturing overhead 500 200Specific fixed costs per day 10 000 5 000Zek Ltds total general fixed costs per day amount to R27 000. The organisation operates its factory 24 hours per day and this equates to one operatingcycle. Each switchbox goes through two processes, namely assembly and testing. Thenumber of units which can be assembled or tested in one operating cycle is as follows:Assemble TestZ686 2 6Z797 6 3Zek Ltd is limited to 600 assembly hours and 400 testing hours in one operating cycle.Management is anxious to ascertain the following, but are unsure as to how to determinethese factors: 1. The most profitable daily (that is, in one operating cycle) production combination.2. The minimum number of units which should be produced in one operating cycle ifZek Ltd wishes to achieve a total daily profit of R10 000. Required 1.1 Explain why linear programming is appropriate in determining the optimal productionsolution for Zek Ltd. (3)1.2 Outline the steps to be undertaken when using the graphic linear programmingmethod. (5)1.3 Determine, using graphic linear programming, the production combination for Zek Ltdwhich maximises daily profit. (Draw the graph in your answer book. Ensure that youlabel the graph comprehensively and clearly.) (17)
Zek Ltd assembles heavy industrial switchboxes. Hitherto, Zek Ltd has assembled only onetype, but recently a decision was made to expand the product range into two types. Thefollowing data pertains to each switchbox:Existing product Z 686 (R) New product Z797 (R)Selling price per unit 8 000 6 800 Variable costs per unit: - Direct materials 6 000 5 600 - Direct labour 500 400 - Manufacturing overhead 500 200Specific fixed costs per day 10 000 5 000Zek Ltds total general fixed costs per day amount to R27 000. The organisation operates its factory 24 hours per day and this equates to one operatingcycle. Each switchbox goes through two processes, namely assembly and testing. Thenumber of units which can be assembled or tested in one operating cycle is as follows:Assemble TestZ686 2 6Z797 6 3Zek Ltd is limited to 600 assembly hours and 400 testing hours in one operating cycle.Management is anxious to ascertain the following, but are unsure as to how to determinethese factors: 1. The most profitable daily (that is, in one operating cycle) production combination.2. The minimum number of units which should be produced in one operating cycle ifZek Ltd wishes to achieve a total daily profit of R10 000. Required 1.1 Explain why linear programming is appropriate in determining the optimal productionsolution for Zek Ltd. (3)1.2 Outline the steps to be undertaken when using the graphic linear programmingmethod. (5)1.3 Determine, using graphic linear programming, the production combination for Zek Ltdwhich maximises daily profit. (Draw the graph in your answer book. Ensure that youlabel the graph comprehensively and clearly.) (17)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Transcribed Image Text:Zek Ltd assembles heavy industrial switchboxes. Hitherto, Zek Ltd has assembled only onetype, but recently a decision
was made to expand the product range into two types. Thefollowing data pertains to each switchbox:Existing product Z
686 (R) New product Z797 (R)Selling price per unit 8 000 6 800 Variable costs per unit: - Direct materials 6 000 5 600 -
Direct labour 500 400 - Manufacturing overhead 500 200Specific fixed costs per day 10 000 5 000Zek Ltds total general
fixed costs per day amount to R27 000. The organisation operates its factory 24 hours per day and this equates to one
operatingcycle. Each switchbox goes through two processes, namely assembly and testing. Thenumber of units which
can be assembled or tested in one operating cycle is as follows:Assemble TestZ686 2 6Z797 6 3Zek Ltd is limited to 600
assembly hours and 400 testing hours in one operating cycle.Management is anxious to ascertain the following, but are
unsure as to how to determinethese factors: 1. The most profitable daily (that is, in one operating cycle) production
combination.2. The minimum number of units which should be produced in one operating cycle ifZek Ltd wishes to
achieve a total daily profit of R10 000. Required 1.1 Explain why linear programming is appropriate in determining the
optimal productionsolution for Zek Ltd. (3)1.2 Outline the steps to be undertaken when using the graphic linear
programmingmethod. (5)1.3 Determine, using graphic linear programming, the production combination for Zek
Ltdwhich maximises daily profit. (Draw the graph in your answer book. Ensure that youlabel the graph comprehensively
and clearly.) (17)
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