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    PROBLEM 2 Semi Final

    Uploaded by

    Isabelle Candelaria
    On October 1, 2011, Danica Company purchased ₱2,000,000 face value 12% bonds for 98 plus accrued interest and brokerage fee. Interest is paid semiannually on January 1 and July 1. Brokerage fee for this transaction was ₱50,000. At what amount should this acquisition of bonds be recorded?

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    © All Rights Reserved
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    PROBLEM 2 Semi Final

    Uploaded by

    Isabelle Candelaria
    20 views4 pages
    On October 1, 2011, Danica Company purchased ₱2,000,000 face value 12% bonds for 98 plus accrued interest and brokerage fee. Interest is paid semiannually on January 1 and July 1. Brokerage fee for this transaction was ₱50,000. At what amount should this acquisition of bonds be recorded?

    Original Title

    PROBLEM 2 semi final

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    On October 1, 2011, Danica Company purchased ₱2,000,000 face value 12% bonds for 98 plus accrued interest and brokerage fee. Interest is paid semiannually on January 1 and July 1. Brokerage fee for this transaction was ₱50,000. At what amount should this acquisition of bonds be recorded?

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    20 views4 pages

    PROBLEM 2 Semi Final

    Uploaded by

    Isabelle Candelaria
    On October 1, 2011, Danica Company purchased ₱2,000,000 face value 12% bonds for 98 plus accrued interest and brokerage fee. Interest is paid semiannually on January 1 and July 1. Brokerage fee for this transaction was ₱50,000. At what amount should this acquisition of bonds be recorded?

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 4

    PROBLEM 2:

    A manufacturer produces bicycles and motorcycles, each of  which must be


    processed through two machine centers.  Machine Center 1 has a maximum of 120
    hours availability and  Machine Center 2 has a maximum of 180
    hours availability. A  bicycle requires six (6) hours in Machine Center 1 and three (3) 
    hours in Machine Center  2. Manufacturing a motorcycle  requires
    four (4) hours in Machine Center 1 and 10 hours in  Machine Center 2. If the profit is
    P450 for each bicycle and  P2,500 for a motorcycle, determine the number of bicycles
    and  the number
    of motorcycles to produce to maximize the profit,  considering that the number of motor
    cycles must not exceed 12  units and bicycles must be at least 10 units.

    ANSWER-SOLUTION TO PROBLEM 2:

    Let x = number of bicycles to produce to maximize the profit

    Let y = number of motorcycles to produce to maximize the profit

    Machine Center 1 Machine Center 2 Profit

    Bicycles 6 3 450

    Motorcycles 4 10 2500

    Objective function :

    Maximize P=450x+2500y 

    Subject to:

    6x+4y<=120                
    3x+10y<=180              
    x>=10                         
    y<=12                          
    y>=0                           

    Reformulate:

    6X+4Y+S1+0S2+OS3+OS4 = 120
    3X + 10Y + 0S1 + S2+ OS3 + OS4=180 
    X + OS1 +OS2+S3+OS4 = 10
    Y + OS1 + OS2 + OS3 + S4 = 12
    Initial Table:

    Cj P450 P2,500 P0.00 P0.00 P.000 P0.00


    Ci PM QNTY X Y S1 S2 S3 S4
    0 S1 120 6 4 1 0 0 0
    0 S2 180 3 10 0 1 0 0
    0 S3 10 1 0 0 0 1 0
    0 S4 12 0 1 0 0 0 1
    Zj 0 0 0 0 0 0 0

    CJ-ZJ 450 2500 0 0 0 0

    Pivot Row:
    S1 = 120/4 = 30
    S2 = 180/10 = 18
    S3 = 10/0 = 0
    S4= 12/1 = 12

    Replace Row
    12/1= 12
    0/1= 0
    1/1= 1
    0/1= 0
    0/1 = 0
    0/1 = 0
    1/1 = 1

    New set:

    New S1 New S2 New S3


    120 - (4(12)) = 72 180-(10(12)) = 60 10-(0(12)) = 10
    6 - (4(0)) = 2 3-(10(0)) = 3 1-(0(0)) = 1
    4 – (4(1)) = 0 10-(10(1) = 0 0-(0(1)) = 0
    1 -(4(0)) = 1 0-(10(0) = 0 0-(0(0)) =0
    0 - (4(0)) = 0 1-(10(0)) = 1 0-(0(0)) =0
    0 - (4(0)) = 0 0-(10(0)) = 0 1-(0(0)) = 1
    0 - (4(1)) = -4 0-(10(1)) = -10 0-(0(1)) = 0
    Table 2

    Cj P450 P2500 P0.00 P0.00 P0.00 P0.00


    Ci PM QNTY X Y S1 S2 S3 S4
    0 S1 72 2 0 1 0 0 -4
    0 S2 60 3 0 0 1 0 0
    0 S3 10 1 0 0 0 1 0
    2,500 Y 12 0 1 0 0 0 1
    Zj 0 30,000 0 2,500 0 0 0 2,500

    Cj-Zj 450 0 0 0 0 -2,500

    Pivot Row
    S1 = 72/2 = 36
    S2 = 60/3 = 20
    S3 = 10/1 = 10
    S4 = 12/0 = 0

    Replace Row:
    10/1 = 10
    1/1 = 1
    0/1= 0
    0/1 = 0
    0/1 = 0
    1/1 = 1
    0/1 = 0

    New set:

    New S1 New S2
    72 - (2(10)) = 52 60-(3(10)) = 30
    2 - (2(1)) = 0 3-(3(1)) = 0
    0 -(2(0)) = 0 0-(3(0) = 0
    1 -(2(0)) = 1 0-(3(0) = 0
    0 - (2(0)) = 0 1-(3(0)) = 1
    0 - (2(1)) = -2 0-(3(1)) = -3
    -4 - (2(0)) = -4 0-(3(0)) = 0
    Table 3:

    Cj P450 P2500 P0.00 P0.00 P0.00 P0.00


    Ci PM QNTY X Y S1 S2 S3 S4
    0 S1 52 0 0 0 1 -2 -4
    0 S2 30 0 0 0 1 -3 0
    450 X 10 450 0 0 0 450 0
    2,500 Y 12 0 1 0 0 0 1
    Zj 0 34,500 0 2,500 0 0 0 2,500

    Cj-Zj 0 0 0 0 -450 -2,500

    Decision:
    As there is no positive in Cj-Zj column, no further improvement is possible.
    Therefore, the Manufactures should produce 10 bicycle and 12 motorcycle in order to
    obtain a maximum profit of 34,500.

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