120 (H:MCV Nil Material B: Rs. 350 (A)
17. Raw materials 'X' costing Rs. 100 per kilogram and 'Y' costing Rs. 60 per kilogram are mixed in
equal proportions for making product 'A'. The loss of materials in processing works out to 25% of
the output. The production expenses are allocated at 50% of direct material cost. The end product is
priced with a margin of 33% over the total cost. Material 'Y' is not easily available and substitute
raw material 'Z' has been found for 'Y' costing Rs 50 per kilogram. It is required to keep the
proportion of this substitute material in the mixture as low as possible and at the same time
maintain the selling price of the end product at existing levels and ensure the same quantum of
profit as at present.
You are required to compute what should be the ratio of mix of the raw materials X and 2
Ans. [Ratio of Mix of Materials X and 2 = 3:21
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