Aqua Accessories plc$.$ is a subsidiary company of River Recreation plc$,$ and

manufactures three products $$ Sun Parasols, Deck Chairs, Buckets and

Spades.

The selling price, variable and fixed costs per unit are as follows:

Sun Parasols Deck Chairs Buckets and Spades

$$

Sales Price $10156$

Variable overheads $362$

Fixed overheads $321$

Profit $473$

Skilled labour hours per unit $1\mathrm{.}5$ hours $2$ hours $0\mathrm{.}50$ hours

Production required $8,500$ units $7,000$ units $9,000$ units

The same skilled labour is used in all the three products. Aqua Accessories plc$.$ has

only $27,000$ skilled labour hours available. It will be very difficult to source any

additional skilled labourers. Due to an existing agreement with customers, Aqua

Accessories plc$.$ must produce $100$ units of each product.

 

 

Required:

Show the optimum production levels of each product after the requisite $100$ units

have been produced.

Answer rating: 100% (QA)

To determine the optimum production levels of each product for Aqua Accessories plc after producing ... View the full answer