Rock Solid concrete manufacturers supply cement mixture directly to both the construction industryand building supply retailers located throughout the country. The company has three machines eachwith a 100% capacity (60 hours) of 40 tons per week. Due to electricity supply concerns, the machineshave only been able to operate at 75% capacity. One ton of cement mixture requires 400 kg of ProductM and 600 kg of Product N. Ignore any wastage. Product M is purchased at R 80/kg and Product NatR25/kg. Each machine requires five operators. Assume four (4) weeks per month. All materialspurchased are used in the mix of cement and all cement is sold in the month it is manufactured. Thecement plant takes up 90% of the total floor space.The following is an extract of some of the transactions for the monthPRODUCT COSTPERIOD COSTMarketing/NOTRANSACTIONDirect Direct Manufacturing AdminMaterial Labour Overheads CostDistribution/Selling cost1Purchase the requiredquantity of Product M forthe month2Purchase the requiredquantity of Product N forthe month3 The machine operators earnR2 000 each per week4The factory supervisorearns R35 000 per month5 Depreciation per machineper annum amounts toR156 000000Rates and taxes amount toR18 000 per month.Apportion the cost.according to floor spaceEach machine requires 15litres of oil per 20-houroperation. Oil costs R275per litreThe general manager earnsR50 000 per month9Carriage on sales amountsto R3 500 per 5 tonsdelivered10 Salesmen commissionamounts to R15 per bagsold, the cement ispackaged in bags of 20kgeachQ.2.2Complete the above table by using monthly cost figures. Redraw the table. You donot need to copy the transaction detail. Only use the question number to indicate thequestion answered.To678

Product cost Period cost No,…

Rock Solid concrete manufacturers supply cement mixture directly to both the construction industry and building supply retailers located throughout the country. The company has three machines each with a 100% capacity (60 hours) of 40 tons per week. Due to electricity supply concerns, the machines have only been able to operate at 75% capacity. One ton of cement mixture requires 400 kg of Product M and 600 kg of Product N. Ignore any wastage. Product M is purchased at R 80/kg and Product N at R25/kg. Each machine requires five operators. Assume four (4) weeks per month. All materials purchased are used in the mix of cement and all cement is sold in the month it is manufactured. The cement plant takes up 90% of the total floor space. The following is an extract of some of the transactions for the month PRODUCT COST NO TRANSACTION Direct Direct Material Labour PERIOD COST Marketing/ Distribution/ Selling cost 1 Purchase the required quantity of Product M for the month 2 Purchase the required quantity of Product N for the month 3 The machine operators earn R2 000 each per week 4 The factory supervisor earns R35 000 per month 5 Depreciation per machine per annum amounts to R156 000 6 Rates and taxes amount to 7 R18 000 per month. Apportion the cost according to floor space Each machine requires 15 litres of oil per 20-hour operation. Oil costs R275 per litre 8 The general manager earns R50 000 per month 9 Carriage on sales amounts to R3 500 per 5 tons delivered 10 Salesmen commission amounts to R15 per bag sold, the cement is packaged in bags of 20kg each Manufacturing Admin Overheads Cost

2nd Edition

ISBN:9781305627734

Author:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson

Publisher:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson

Chapter11: Linear Optimization Models

Section: Chapter Questions

Problem 7P: Vollmer Manufacturing makes three components for sale to refrigeration companies. The components are...