Vicca Beverages Ltd seeks to produce Sobolo and Asana for the South African market. They are…

Vicca Beverages Ltd seeks to produce Sobolo and Asana for the South African market. They are however constrained by capital and labour availability for this endeavour. The capital available for the project is GHC30,000 while the total manhours available is 2,000. The production team of the Vicca has noted that GHC2 and GHC3 as well as 2 hours and 1 hour is required for the production of both Sobolo and Asana respectively. Also, note that Sobolo and Asana cost ZAR 5 and ZAR 3 respectively in South Africa. With this preamble in mind, please answer the following questions:

I. Should Vicca BL decide to manufacture only one product for the South African market how many units of Asana or Sobolo can they produce?

II. How can they optimize the production of both products?

III. Which production option maximizes their revenue from the South African market and why?

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