Question
Particulars Product A Price per unit (RO) Product B Price per unit (RO) Sales price 35 25 Material 16 Direct wages 5 Variable 100%
Particulars Product A Price per unit (RO) Product B Price per unit (RO) Sales price 35 25 Material 16 Direct wages 5 Variable 100% of direct wages 17 3 100% of direct wages expenses Fixed expenses RO 1,500 The following scenarios are predicted by the Management: Scenario 1:200 units of product A and 100 units of product B Scenario 2: 150 units of product A and 150 units of product B Scenario 3: 250 units of product A and 50 units of product B You are required to: A. Compute the contribution per unit of both Product A and Product B. Find out total contribution and profits for each of the scenario. (15x3 = 45 marks) B. In your opinion which is the most profitable scenario and justify your recommendation (10 marks)
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