Question: Question One Linux Optical Products Ltd manufactures highly specialised optical equipment for surveillance purposes. There is a high demand for their products, but the company

 Question One Linux Optical Products Ltd manufactures highly specialised optical equipment

Question One Linux Optical Products Ltd manufactures highly specialised optical equipment for surveillance purposes. There is a high demand for their products, but the company operates under the constraint of a shortage of specialist labour which is available at 700 hours a year. The production team is currently formulating a production plan for the company's two principal products, G and H, for 2021 and wishes to determine the optimal product mix. Details of the two products are as follows: Product G Product H Selling Price 1,570 2,060 Variable cost of metals, lenses etc. 462 772 Specialist labour costs @ 20.00 per hour 80 100 Other variable labour costs 265 306 Annual demand 135 units 93 units (a) Calculate the contribution per unit of limiting factor for products G and H. [10 marks] (b) Advise the production team on the plan they should follow for 2021. [10 marks)

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