$519$

Part A

Case Stady

A company manufactures and sells three products A$.$

$B$ and $C$ as per details given below:

$\backslash$table$[[$Particulars$,$A $($in Rs$.),$B $($in Rs$.),$C $($in Rs$.)],[$Deret Materals,$20,16,18],[$Dreet Labour,$12,14,12],[$Varabke Oveheads,$8,10,6],[$Fred Overteads,$6,6,4],[$Toral Cost,$46,46,40],[$Profir$,18,14,12],[$Selling Price,$64,60,52],[$Sales fanis$),10,000,5,000,8,000]]$

$($a$)$ Rank the products according to profitability. What is the profit currently earned by the company?

$($b$)$ Production arrangements are such that if one of the products is discontinued, sales of the other

tweo can be increased by SOt$4.$ Management Tama te discontinue prodact $C\text{'}$ as its consnbstos is least. Do you agrec? Present your recommendation supported by suitable analysis.

$($c$)$ There is also a proposal to istroduce a bighly profitable prodact $\text{'}D\text{'}$ usiag the exisuing facritities along with the two prodects retaised ar the onginal level of production. The details relating $10$ product $\text{'}$D$\text{'}$ are as follows :

$\backslash$table$[[$Yariable Cost per anir,Amoant $($in Rs$.)],[$Direct Materials,$12],[$Direct Labour,$8],[$Variable Overheads,$5],[$Selling price per uait,$48]]$

Demand for $\text{'}D\text{'}$ is uncertain Masagement wans $1$o know the minimum salss that would cosure the maximum profit as per $($b$).$

Give your recommendation supported by working?

P$.$T$.$O$.$