Problem 107 You are provided with the filowing information relating to the sales, estimated demands and production costs for each bench, table and chair Bench Table Chair E71 Estimated selling price Maximum demand in units 1.800 1.500 3.000 Raw materials - timber metal fittings 54 E7 - fabric 16 22 E1 Packing Each bench, table or chait involves in two separate stages of processing The timber is machined, finished and assembled Metal fittings are faced The products are painted and varnished to packaging in polythene and cardboard Labour costs are based on the following estimated time (in minutes required for each processing stage: 2. Stage 2 Stage 1 180 Benches 20 Tables 150 50 Chairs The following rates for labour are applied Stage 1 Stage 2 E per hour There are a maximum of 10,00 hours of labour available for stage 1 Required: (a) Advise the management the maximum output for each product and the total contribution of the proposed optimal production plan (b) Explain clearly the basis method used in tal Ich Identify two factors that should be considered before a final decision is made Problem 107 You are provided with the following information relating to the sales, estimated demands and production costs for each bench, table and chair Table Chair 60 E71 45 In units 10 12 E2 4 E7 Bench Estimated selling price Maximum demand 1,800 1,500 3,000 Raw materials - timber -metal fittings - fabric Packing Each bench, table or chair involves in two separate stages of processing 1. The timber is machined, finished and assembled. Metaf fittings are fixed. 2. The products are painted and varnished to packaging in polythene and cardboard. Labour costs are based on the following estimated time in minutes) required for each processing stage: E6 E2 2 E1 Stage 1 Stage 2 Benches 180 20 Tables 150 60 Chairs 60 40 The following rates for labour are applied: Stage 2 3 Stage 1 E per hour There are a maximum of 10,500 hours of labour available for stage 1 Required: (a) Advise the management the maximum output for each product and the total contribution of the proposed optimal production plan. (b) Explain clearly the basis method used in (a). (c) Identify two factors that should be considered before a final decision is made