Zing IncProduces Both Soft and Firm Twin-Size Mattresses Most of the Stuffing Process Is Done by Hand

question 42

Essay

Zing Inc.produces both soft and firm twin-size mattresses.Selected data related to each product is as follows:
$\begin{array}{lcc} &\underline{ \text { Soft }} &\underline{ \text { Firm }} \\ \text { Sales price per unit } & \$ 300 & \$ 400 \\\text { Direct materials per unit } & 50 & 70 \\\text { Direct labour per unit } & 40 & 60 \\\text { Variable overhead per unit } & 20 &30 \\\text { Direct labour hours per unit } & 40 \text { minutes } & 60 \text { minutes }\end{array}$
Most of the stuffing process is done by hand.There are a maximum of 2 000 000 direct labour minutes available each year.
Required:
A. If there is unlimited demand for both products, how many of each type of mattress should be produced in order to maximise profits?

B. If the company believes that there is sufficient demand for up to 30000 soft and 20000 firm mattresses each year, how many of each type should be installed in order to maximise profits?

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