Bird Ltd makes 3 types of products: Pidgeon, Dove and Sparrow. Extracts from the budget for the next year are as follows:

                                                                  Pidgeon         Dove       Sparrow

Demand and production (units)              1,000         1,500            2,000

The following information is per unit of each product

        Per unit                               Pidgeon          Dove         Sparrow

Selling price                                    87                 170                    154

Materials                                          15                  40                     30

Labour                                             20                      50                 40

Variable overhead                            12                     30               24

Labour will be paid at £5 per hour The company expects the total fixed cost budget to be £120,000

It has now been realised that there will only be 30,000 labour hours available next year.

Required:
Calculate the production plan that will maximise profit for Bird Ltd for the next year. State what that plan will be (All workings must be shown)

Answer rating: 100% (QA)

To calculate the production plan that will maximize profit for Bird Ltd for the next year we need to determine the optimal production quantities for each product based on the available labor hours and ... View the full answer