12. Stone Age Surfboards is a small manufacturer of two types of popular low-tid
ID: 3055771 • Letter: 1
Question
12.
Stone Age Surfboards is a small manufacturer of two types of popular low-tide surfboards, the Graystone and the Lava models. The manufacturing process consists of two departments: fabrication and finishing. The fabrication department has 8 skilled workers, each of whom works 9.25 hours per day. The finishing department has 5 workers, each of whom works a 6-hour shift per day. Each pair of Graystone surfboards requires 2.5 labor hours in the fabrication department and 2 labor hours in finishing. The Lava model requires 4.2 labor-hours in fabrication and 3.6 labor-hours in finishing. The company operates 6 days a week. It makes a per unit profit of $40 on the Graystone model and $60 on the Lava model. The company anticipates selling at least twice as many Lava models as Graystone models.
If the unit profit on both Graystone and Lava surfboards is increased by $10, what is the Allowable Decrease for Lava surfboards?
A. 38.46 B. 95.00 C. 20.00 D. 11.11Explanation / Answer
Initially Fabrication Finishing Profit per unit Units Graystone 2.5 2 40 18 Lava model 4.2 3.6 60 40 213 180 3120 36 444 180 After increasing profit by $10 each Now to keep the profit same decrease in the lava surf boards Profit per unit Units Graystone 50 18 Keeping it constant Lava model 70 32 Total profit 3120 3140 So for 32 lava sur boards we get nearly the same profit. The decrease in number of lava surf boards is from 40 to 32 i.e. 20% change 20%
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