Adrian Bicycle Company (ABC) has the hottest new products on the upscale toy market for boys’ and girls’ bikes in bright fashion colors, with oversized hubs and axles, shell design safety tires, a strong padded frame,-chrome plaited chains, brackets and valves, and a non slip handlebar.
Due to the seller’s market for high quality toys for the newest baby boomers, ABC can sell all the bicycles it manufactures at the following prices: boy’s bikes-P220, girls’ bikes-P175. This is the price payable to ABC at its Francistown plant.
The firm’s accountant has determined that direct labor costs will be 45% of the price ABC receives for the boys’ model and 40% for the price received for the girls’ model.
Production costs other than labor, but excluding painting and packaging, are P44 per boys’ bicycle and P30 per girls’ bicycle. Painting and packaging are P20 per bike, regardless of model.
The Francistown plant’s overall production capacity is 390 bicycles per day. At least 100 boys’ bicycles should be produced per day and not more than 250 girls’ bikes should be produced per day. Each boy’s bike requires 3.00 labor hours and each girl’s model, 1.5 hours, to complete. ABC currently employs 120 workers, who each put in an eight hour day. The firm has no desire to hire or fire to affect labor availability, for it believes its stable workforce is one of its biggest assets.
To determine the number of boys' and girls' bicycles that can be produced per day, we need to consider the production capacity, labor hours required, and the availability of workers.
1. Production Capacity:
The Francistown plant can produce a maximum of 390 bicycles per day.
2. Boys' Bicycles:
At least 100 boys' bicycles should be produced per day.
3. Girls' Bicycles:
Not more than 250 girls' bicycles should be produced per day.
4. Labor Hours:
Each boy's bike requires 3.00 labor hours.
Each girl's bike requires 1.5 labor hours.
5. Workers:
ABC currently employs 120 workers, who each work an 8-hour day.
Now, let's calculate the number of boys' and girls' bicycles that can be produced.
For boys' bicycles:
Since each boy's bike requires 3.00 labor hours, we can calculate the maximum number of boy's bikes produced as follows:
Max Boy's Bikes = (Total Labor Hours Available) / (Labor Hours per Boy's Bike)
Max Boy's Bikes = (120 workers * 8 hours per worker) / (3.00 hours per boy's bike)
Max Boy's Bikes = 320 / 3.00
Max Boy's Bikes = 106.67
Since we can't produce a fraction of a bicycle, the maximum number of boys' bicycles that can be produced is 106.
For girls' bicycles:
Since each girl's bike requires 1.5 labor hours, we can calculate the maximum number of girl's bikes produced as follows:
Max Girl's Bikes = (Total Labor Hours Available) / (Labor Hours per Girl's Bike)
Max Girl's Bikes = (120 workers * 8 hours per worker) / (1.5 hours per girl's bike)
Max Girl's Bikes = 320 / 1.5
Max Girl's Bikes = 213.33
Since we can't produce a fraction of a bicycle, the maximum number of girls' bicycles that can be produced is 213.
Therefore, considering the production capacity, labor hours required, and the availability of workers, the maximum number of boys' bicycles that can be produced per day is 106, and the maximum number of girls' bicycles that can be produced per day is 213.