Question

Elaborate.
Q No. 2 the following particulars are taken from the record of a company engaged in manufacturing two
products, X and Y, from certain material:
Product X
(Rs. per unit)
Product Y
(Rs. Per unit)
Sales
2500
5000
Material cost (Rs. 50 per kg)
500
1250
Direct labour (Rs. 30 per hour)
750
1500
Variable overhead
250
500
Total fixed overhead: Rs. 1000000
Comment on the profitability of each product when:
1.
Total sales in value are limited.
Raw material is in short supply.
Production capacity is the limiting factor.
Total availability of raw material is 30000 kg. And maximum sales potential of each product
IV.​

Answer 1

Answer:

Explanation:

The following particulars are taken from the records of a  company

engaged in manufacturing  two products,  A and B, from a  certain material:

                                          Material A                         Material B

                                          (per unit)                          (per unit)

                                             Rs.                                   Rs.

Sales                                        2,500                            5,000

Material cost (Rs. 50 per kg)           500                            1,250

Direct labour (Rs. 30 per hour)          750                            1,500

Variable overheads                        250                             500

Total fixed overheads                     Rs 10,00,000

Comment on the profitability  of each product when

(i)Total sales value is limited

Product x is more profitable

(ii)Raw materials are in short supply

Product x is more profitable

(iii)Production capacity is the limiting factor

Product x is more profitable

(iv) Total availability  of raw materials is 20,000 kg and maximum sales potential of each product is 1,000 units.Find the product mix to yield maximum profits.

Product x 1000 units, B 400 units