You have been hired as an analyst by Redsaw Limited, which manufactures three different models of widget:
Question:
The marketing department expects that the demand for the Budget and Classic models is unlimited, and that because of its high price no more than 50 units of the Deluxe model will be sold. The Budget model requires 16 grams of copper and 12 grams of aluminium. The Classic model requires 12 grams of copper, 14 grams of aluminium and 12 grams of gold. The deluxe model requires 12 grams of aluminium and 26 grams of gold. The weekly supplies of copper, aluminium and gold are limited to 120 kilograms, 240 kilograms and 200 grams respectively. In addition, the Budget and Classic models require 4 man-hours of machining, while the Deluxe model requires 6 man-hours of machining. The available capacity for machining is limited to 80 man-hours per week.
a) What type of model is required to complete the analysis?
B) Briefly describe the decision variables and any constraints on the model?
Management Accounting
ISBN: 978-0132570848
6th Canadian edition
Authors: Charles T. Horngren, Gary L. Sundem, William O. Stratton, Phillip Beaulieu