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Arada [10]
3 years ago
15

The WorldLight Company produces two light fixtures (products 1 and 2) that require both metal frame parts and electrical compone

nts. Management wants to determine how many units of each product to produce so as to maximize profit. For each unit of product 1, 1 unitof frame parts and 2 units of electrical components are required. For each unit of product 2, 3 units of frame parts and 2 units of electrical components are required. The company has 200 units of frame parts and 300 units of electrical components. Each unit of product 1 gives a profit of $2, and each unit of product 2, up to 70 units, gives a profit of $4. Any excess over 60 units of product 2 brings no profit, so such an excess has been ruled out. Formulate a linear programming model for this problem. Use the graphical method to solve this model. What is the resulting total profit?

Business
1 answer:
Deffense [45]3 years ago
4 0

Answer:

Explanation:

a) x1 = number of unit product 1 to produce , and

x2 number of unit product 2 to produce

A linear program that will maximize world light profit is the following

maximize x_1+2x_2 subject to x_1+3x_2\leq 200

2x_1+2x_2\leq 300\\\\x_2\leq 60\\\\x_1\geq 0\\\\x_2\geq 0

Unit 1 is used both in products in 1 : 3 ratio which can be a maximum of 200 unit 2 is used in 2 : 2 ratio which can be maximum of 300

So, this can be written as the inequations

Profit functio is p = 0ne dollar on product A and two dollar on product B

= x + 2y

Now , we find a feasible area whose extremeties will give the maximum profit for, the  graph is ( see attached file )

So on the graph, we can get the other extremeties of the shaded regional so which will not give maximum profit ,

Thus , the maximum possible profit is

p = ($1 * 125) + ($2 * 25)

= $175

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Careers with adverse working conditions often demand higher wages. Adverse working conditions might include
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3 years ago
Tamarisk Leasing Company agrees to lease equipment to Vaughn Corporation on January 1, 2020. The following information relates t
____ [38]

Answer:

1. Finance lease to Vaughn Corporation

Sales-type lease

2. Annual Rental = $ 137,604

3. Lease Liability = $ 741,418

4. Vaughn Corporation.

2020

Jan. 1

Dr Lease Equipment $741,418

Cr Lease Liability $741,418

Jan. 1

Dr Lease Liability $137,064

Cr Cash $137,064

Dec. 31

Dr Depreciation Expense $99,488

Cr Accumulated Depreciation - Finance Lease $99,488

Dec. 31

Dr Interest Expense $66,479

Cr Interest Payable $66,479

2021

Jan. 1

Dr Lease Liability $70,585

Dr Interest Payable $66,479

Cr Cash $137,064

Dec. 31

Dr Depreciation Expense $99,488

Dr Accumulated Depreciation - Finance Lease $99,488

Dec. 31

Dr Interest Expense $58,715

Dr Interest Payable $58,715

5. Tamarisk Leasing Company.

2020

Jan. 1

Dr Lease Receivable $760,000

Dr Cost of Goods Sold $541,000

Cr Sales Revenue $760,000

Cr Inventory $541,000

Jan. 1

Dr Cash $137,064

Cr Lease Receivable $137,064

Dec. 31

Dr Interest Receivable $62,294

Cr Interest Revenue $62,294

2021

Jan. 1

Dr Cash $137,064

Cr Lease Receivable $74,770

Cr Interest Receivable $62,294

Dec. 31

Dr Interest Receivable $54,817

Cr Interest Revenue $54,817

Explanation:

1. Discussion of the nature of this lease for both the lessee and the lessor.

(i) Based on the information given it is a Finance lease to Vaughn Corporation reason been that the term of the lease is higher than 75% of the leased asset economic life based on the fact that the term of the leaseis 78% calculated as (7/9).

(ii) Based on the information given Tamarisk Leasing Company reason been the lease payments can be predictable because their are no uncertainties concerning the costs that is yet to be incurred by the lessor, and secondly the term of the lease is higher than 75% of the asset’s economic life because the amount of $ 760,000 of the equipment is above the lessor’s cost of the amount of $ 541,000 which is why the lease is a Sales-type lease

2. Calculation of Annual Rental Payment

Annual Rental = {FV - (RV * PVF(n=7 years, r=10%))} / PVADF(n=7 years, r=10%)

Annual Rental = {$ 760,000 - ($ 45,000 * 0.51316} / 5.35526

Annual Rental = $ 137,604

3. Calculation of Lease Liability to the Lessee.

First step

Present Value of Annual Payments = $ 137,604 * PVADF(n= 7 years, r=11%)

Present Value of Annual Payments = $ 137,604 *5.23054

Present Value of Annual Payments = $ 719,743

Present Value of Guaranteed Residual Value = $ 45,000 * PVF(n= 7 years, r=11%)

Present Value of Annual Payments = $ 45,000 * .48166

Present Value of Annual Payments = $ 21,675

Hence,

Lease Liability = $ 719,743 + $ 21,675

Lease Liability = $ 741,418

4. Preparation of the Journal Entries for Vaughn Corporation.

2020

Jan. 1

Dr Lease Equipment $741,418

Cr Lease Liability $741,418

Jan. 1

Dr Lease Liability $137,064

Cr Cash $137,064

Dec. 31

Dr Depreciation Expense $99,488

Cr Accumulated Depreciation - Finance Lease $99,488

($ 741418 - $ 45,000) ÷ 7 years

Dec. 31

Dr Interest Expense $66,479

Cr Interest Payable $66,479

($ 741418 - $ 137,064) * 11%

2021

Jan. 1

Dr Lease Liability $70,585

Dr Interest Payable $66,479

Cr Cash $137,064

Dec. 31

Dr Depreciation Expense $99,488

Dr Accumulated Depreciation - Finance Lease $99,488

Dec. 31

Dr Interest Expense $58,715

Dr Interest Payable $58,715

($ 741418 - $ 137,064 - $ 70,585) * 11%

5. Preparation of the Journal Entries for Tamarisk Leasing Company.

2020

Jan. 1

Dr Lease Receivable $760,000

Dr Cost of Goods Sold $541,000

Cr Sales Revenue $760,000

Cr Inventory $541,000

Jan. 1

Dr Cash $137,064

Cr Lease Receivable $137,064

Dec. 31

Dr Interest Receivable $62,294

Cr Interest Revenue $62,294

($ 760,000 - $ 137064) * 10%

2021

Jan. 1

Dr Cash $137,064

Cr Lease Receivable $74,770

Cr Interest Receivable $62,294

Dec. 31

Dr Interest Receivable $54,817

Cr Interest Revenue $54,817

($ 760,000 - $ 137064 - $ 74,770) * 10%

7 0
3 years ago
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