Chitukuko ltd produces two types of bed; standard and deluxe in one of its factories. Production capacity is limited to 8,500 machine hours and 5,700 direct labour hours per period.

 

The following information is provided concerning the two products:

 

		Standard	Deluxe
	Estimated demand(beds)	315	135
	Selling price per bed (K)	2,240	3,140
	Variable costs per bed (K)	1,260	1,740
	Fixed costs per bed (K)	800	1,400
	Machine hours per bed	16	28
	Direct labour hours per bed	12	14

 

Fixed costs are absorbed into unit costs at a rate per machine hour based on full capacity.

 

Required:

 

Calculate the profit maximizing production plan and the corresponding optimum profit.