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Problem 15 Following particulars are taken from the records of a company engaged in manufacturing two products, A and B from a certain material: |
Problem 15 Following particulars are taken from the records of a company engaged in manufacturing two products, A and B from a certain material: | Product A Product B (per unit) $ (per unit) $ Sales 2,500 5,000 Material cost ($50 per kg) 500 1,250 Direct labour ($30 per hour) 750 1,500 Variable overhead 250 500 Total fixed overheads: $10,00,000 . Comment on the profitability of each product when: (i) Total sales in value is limited (ii) Raw materials is in short supply . (iii) Production capacity is the limiting factor (iv) Total availability of raw materials is 20,000 kgs and maximum sales potential of each product is 1,000 units, find the product mix to yield maximum profits
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