AMA

AMA

Question 10 Ezee Lid makes two products, and Z. All units produced are sold. There is no inventory build up. Production facilities may be used interchangeably for both the products. Sales units are the limiting factor. The following information is given Present Level Proposed Increase Total Contribution /unit 25 20 46,000 Fixed Cost? 47,500 Sales units (nos) 3.000 2,000 4.000 5.000 For increase in quantities above 4,000 units for each product, there will be an increase in variable selling costs, (for the increased portion only), thereby reducing the contribution per unit to the following figures: Contribution per unit (0) Units 4001-5000 5001-6000 No sales possible Above 6000 For the present level, find the break-even point with the present product mix. on What is the minimum number of incremental units to be sold to recover the additional fixed cost of 47,500 to be incurred (Present product mix need not be maintained) If you are allowed to choose the best product mix for the incrementarevet (while takine the present mix given in sent mix given in the first table above for the present level), what would be the idual product quantities and the corresponding total contributions, the total average contribution per unit and the total profits for the complete production? (May 2012) contribution per