Reference no: EM132540262

Silent Air manufactures two different models of ceiling fans. The standard model and the deluxe model with the following selling and cost details:

Silent Air Ceiling Fans                                          Standard                    Deluxe

                                                                   $ per unit           $ per unit

Selling price                                                       90                     150

Direct material                                                    29                       65

Direct labour                                                         15                   30

Manufacturing overhead @$45 per machine hour          $45                  $90

Monthly demand (Units)                                        25,000                30,000

Hint: Use manufacturing overhead to calculate the number of machine hours required for each product.

The fixed manufacturing overhead component included in the above unit costs is $30 per machine hour. Just as the summer season began in November, a major rainstorm caused a flash flood and damaged one of the two production lines at Silent Air's plant. It will take one month for repairs to be completed on the damaged production line and therefore for the next month, the plant, even working overtime on a single production line has a capacity of 55,000 machine hours.

Required:

Question 1: Determine how many units of each product should be produced in November to maximise profitability of using the limited resource of machine hours.