Question

A company produces two products in one of its plants: A and B. Annual production of Product A is 3000 units and of Product B is 2000 units. Product A has 25 components and Product B has 36 components. For Product A, 40% of the components are made in the plant, while 60% are purchased parts. For Product B, 30% of the components are made in the plant, while 70% are purchased. For these two products taken together, what is the total number of a) components made in the plant and b) components purchased?

Answer 1

For Product A

Total units = 3000

Components in Product A/unit = 25

Total components of Product A = 25*3000 = 75000

Components of A produced in plant = 40% * Total components of A = 0.4 * 75000 = 30000

Components of A purchased = 60% * Total components of A = 0.6 * 75000 = 45000

For Product B

Total units = 2000

Components in Product B/unit = 36

Total components of Product B = 36*2000 = 72000

Components of B produced in plant = 30% * Total components of B = 0.3 * 72000 = 21600

Components of B purchased = 60% * Total components of B = 0.7 * 72000 = 50400

Taken together,

a) Total components produced = Total Components of A produced in plant + Total Components of B produced in plant

= 30000 + 21600 = 51600

b) Total components purchased = Total Components of A purchased + Total Components of B purchased

= 45000 + 50400 = 95400