Trinity product Limited makes and sells three types of electronic security systems for which the following information is available Standard cost and selling price per unit Day Scan Night scan Omni scan GH¢ GH¢ GH¢ Material 70 110 155 Manufacturing labour 40 55 70 Installation labour 24 32 44 Variable overheads 16 20 28 Selling price 250 320 460 Fixed cost for the period are GH¢450,000 and installation labour, which is highly skilled is available for 25,000 hours only in a period and is paid GH¢8 per hour. Both manufacturing and installation labour are variable cost. The maximum demand for the period is: Day scan 2,000 units; Night scan 3,000 units; Omni scan 1,800 units. Required a) Calculate the shortfall (if any) in hours of installation labour. b) Determine the best production plan assuming the company wishes to maximize profit. c) calculate the maximum profit that could be achieved from the plan in part (b) above d) Having carried out an investigation of the availability of installation labour, the firm thinks that by offering GHS 12 per hour, additional installation would become available and thus overcome the labour shortage. Based on the result obtained above, you are required to advice the firm whether or not to implement this proposal.
Trinity product Limited makes and sells three types of electronic security systems for
which the following information is available
Day Scan Night scan Omni scan
GH¢ GH¢ GH¢
Material 70 110 155
Manufacturing labour 40 55 70
Installation labour 24 32 44
Variable
Selling price 250 320 460
Fixed cost for the period are GH¢450,000 and installation labour, which is highly skilled
is available for 25,000 hours only in a period and is paid GH¢8 per hour. Both
manufacturing and installation labour are variable cost. The maximum demand for the
period is: Day scan 2,000 units; Night scan 3,000 units; Omni scan 1,800
units.
Required
a) Calculate the shortfall (if any) in hours of installation labour.
b) Determine the best production plan assuming the company wishes to maximize
profit.
c) calculate the maximum profit that could be achieved from the plan in part (b) above
d) Having carried out an investigation of the availability of installation labour, the firm
thinks that by offering GHS 12 per hour, additional installation would become
available and thus overcome the labour shortage. Based on the result obtained
above, you are required to advice the firm whether or not to implement this proposal.
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