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| F Ltd F plc makes and sells two lawnmowers, A and B, each of which passes through the same automated production operations. The following estimated information is available for January. Product unit data  Original estimates of production/sales of products A and B are 120,000 units and 45,000 units respectively. The selling prices per unit for A and B are $60 and $70 respectively. Maximum demand for each product is 20% above the estimated sales levels. Total fixed production overhead cost is $1,470,000. This is absorbed by products A and B at an average rate per hour based on the estimated production levels. One of the production operations has a maximum capacity of 3,075 hours which has been identified as a bottleneck which limits the overall estimated production/sales of products A and B. The bottleneck hours required per product unit for products A and B are 0.02 and 0.015 respectively.(a) Calculate the mix (in units) of products A and B which will maximise net profit and the value (in $) of the maximum net profit. (6 marks) |