Floral Ltd delivers bouquets of fresh flowers by post and produces three different bouquets Spring Posy,...
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Floral Ltd delivers bouquets of fresh flowers by post and produces three different bouquets Spring Posy, Classic Bouquet and Deluxe Bouquet. Details relating to the next month are as follows: Spring Posy Classic Deluxe Bouquet Bouquet Demand in bouquets (units) 550 400 150 Selling Price per bouquet (unit) Direct Materials: number of flower stems per bouquet Direct Materials: cost per flower stem Direct Labour: hours per bouquet £17.50 £24.50 £35.00 12 15 £1.25 £1.55 £1.75 0.1 0.2 0.3 One bouquet is one unit of output. Direct labour is paid £11 per hour and fixed costs are £3,500 per month. The company can only acquire 10,800 flower stems of direct materials and has 200 direct labour hours available in a normal working month to meet demand. Required: a. Identify whether direct material (flower stems) or direct labour is the limiting factor. b. Calculate the contribution per limiting factor for each product and rank the products accordingly. c. Determine the production plan that will optimise the monthly contribution showing the number of bouquets (units) of each product produced, the total contribution and the profit for the month. Floral Ltd delivers bouquets of fresh flowers by post and produces three different bouquets Spring Posy, Classic Bouquet and Deluxe Bouquet. Details relating to the next month are as follows: Spring Posy Classic Deluxe Bouquet Bouquet Demand in bouquets (units) 550 400 150 Selling Price per bouquet (unit) Direct Materials: number of flower stems per bouquet Direct Materials: cost per flower stem Direct Labour: hours per bouquet £17.50 £24.50 £35.00 12 15 £1.25 £1.55 £1.75 0.1 0.2 0.3 One bouquet is one unit of output. Direct labour is paid £11 per hour and fixed costs are £3,500 per month. The company can only acquire 10,800 flower stems of direct materials and has 200 direct labour hours available in a normal working month to meet demand. Required: a. Identify whether direct material (flower stems) or direct labour is the limiting factor. b. Calculate the contribution per limiting factor for each product and rank the products accordingly. c. Determine the production plan that will optimise the monthly contribution showing the number of bouquets (units) of each product produced, the total contribution and the profit for the month.
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Answer to a Since there is a shortage of Stems as compared to the demand ... View the full answer
Related Book For
Vector Mechanics for Engineers Statics and Dynamics
ISBN: 978-0073212227
8th Edition
Authors: Ferdinand Beer, E. Russell Johnston, Jr., Elliot Eisenberg, William Clausen, David Mazurek, Phillip Cornwell
Posted Date:
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