What is production mix which maximise total contribution

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Reference no: EM13920542

Brunel manufactures plastic-covered steel fencing in two qualities, standard and heavy gauge. Both products pass through the same processes, involving steel-forming and plastic bonding.

Standard gauge fencing sells at $18 a roll and heavy gauge fencing at $24 a roll. Variable costs per roll are $16 and $21 respectively. There is an unlimited market for the standard gauge, but demand for the heavy gauge is limited to 1,300 rolls a year. Factory operations are limited to 2,400 hours a year in each of the two production processes.

Processing hours per roll

Gauge	Steel-forming	Plastic-bonding
Standard	0.6	0.4
Heavy	0.8	1.2

What is the production mix which will maximise total contribution and what would be the total contribution?

Reference no: EM13920542

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