1. Production and Transportation cost = (80000 units)(97 pence/unit)

= 7,760,000 pence

2. The rest of the capacity of factory ‘1’ (90,000 – 80,000 = 10,000) can be used for producing and transporting to manufacturer ‘B’

Production and Transportation cost = (10000 units)(98 pence/unit)

= 980,000 pence

Hence the total cost of production and transportation for factory ‘1’ is 7,760,000 + 980,000 = 8,740,000 pence = 87,400/-

3. The rest of the demand of manufacturer ‘B’ (72,000 – 10,000 = 62,000) should be produced by factory ‘3’ having lesser costs than factory ‘2’.

Production and Transportation cost = (62000)(109)

= 6,758,000 pence

4. The rest of the capacity of factory ‘3’ (80,000 – 62,000 = 18,000) can be used to produce and transport for manufacturer ‘A’.

Production and Transportation cost = (18000)(107)

= 1,926,000 pence

Hence the total cost of production and transportation for factory ‘3’ is 6,758,000 + 1,926,000 = 8,684,000 pence = 86,840/-

5. The rest of the demand of manufacturer ‘A’ (51,000 – 18,000 = 33,000) is produced by factory ‘2’

Production and Transportation cost = (33000)(113)

= 3,729,000 pence

Hence the total cost of production and transportation for manufacturer ‘A’ order is 1,926,000 + 3,729,000 = 5,655,000 pence = 56,550/-

6. The total demand of manufacturer ‘D’ can be supplied by factory ‘2’

Production and Transportation cost = (58000)(114)

= 6,612,000 pence

Hence the total cost of production and transportation for manufacturer ‘D’ order is 6,612,000 pence = 66,120/-

Conclusion

Total Cost of production for factories and manufacturers

Factory

Computer…

As shown by the graph, the relationship is somewhat linear at values 13 onwards (lower part of the graph) and these are non-linear at higher part of the graph. The values for Wells Fargo Home Mortgage are non-linear with huge differences as shown by the graph.