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The following particulars are taken from the records of XYZ limited engaged in the
manufacturing of two products X and Y from a certain material :
Product X ( Per Unit) Product Y(Per Unit)
Sales Rs 2,500 Rs 5,000
Material Cost (Rs 50 per kg) 500 1,250
Direct Labour (Rs 30 per hour) 750 1,500
Variable Overhead 250 500
Comment on profitability of each product when :
(a) When sales in Value is limited
(b) Raw material is in short supply
(c) Production capacity is the limiting factor
(d) Find the product mix to yield maximum profits if total availability of raw material is
20,000 kg and maximum sales potential of each product is 1,000 units.
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