Question

The following particulars are obtained from costing records of a Leather factory: Particulars Product A Product B (Rs.per unit ) ( Rs.per unit ) Selling price 200 500 Material (Rs.20 per litre) 40 160 Labour (Rs.10 per hour) 50 100 Variable overheads 20 40 Total fixed overheads Rs. 15,000 Rs. 15,000 Comment on the profitability of each product when: (i) Raw Material is in short supply. (ii) Production Capacity is limited. (iii) Sales Quantity is limited. (iv) Sales value is limited. (v) Only 1,000 litres of raw material is available for both the products in total and maximum sales quantity of each product is 300 units.​

Answer 1

Answer:

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