KnitWorks Ltd KnitWorks Has 15,000 Machine Hours Available for Production

question 60

Essay

KnitWorks Ltd. produces three kinds of yarn. Details of each type of yarn are as follows: $\begin{array}{lccc}&\text { Type I } & \text { Type II } & \text { Type III } \\\text { Price per unit } & £ 200 & £ 250 & £ 100 \\\text { Unit variable cost } & £ 150 & £ 100 & £ 60 \\\text { Machine hours required } & 0.5 & 2.0 & 0.1\end{array}$ KnitWorks has 15,000 machine hours available for production.
a.Determine the amount of each type of yarn that KnitWorks should produce.
b.Assume that the demand for each type of yarn is limited to 10,000 units each. Determine the amount of each type of yarn that KnitWorks should produce.
c.Assume that the demand for each type of yarn is limited to 10,000 units each. Determine KnitWorks' contribution margin.

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Definitions:

Nonpolar

Describes molecules that do not have a separation of electric charge, leading to a lack of electric poles and evenly distributed electrical charges.

Lewis Structures

Diagrams that show the bonding between atoms of a molecule and the lone pairs of electrons that may exist in the molecule, illustrating the valence electron arrangements.

Nitric Acid

A highly corrosive and toxic strong acid with the formula HNO3, used in the production of fertilizers, explosives, and in various nitration processes.

Formal Charges

The assignment of a charge to an atom within a molecule based on the assumption that electrons in chemical bonds are evenly distributed amongst atoms.