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Question 1: From the following information, find the most profitable product mix if direct labour is limited to 18,600 hours. It is also given to
Question 1: From the following information, find the most profitable product mix if direct labour is limited to 18,600 hours. It is also given to you that all the three products are produced from same material, machine and labour. Product A 1800 60 Product B 3000 55 Product C 1200 50 Units budgeted to be produced and sold Selling price per unit Rs. Requirement per unit: Direct material Direct labour Variable overheads Fixed overheads Cost of direct material per kg Direct labour hour rate Maximum possible units of sales 5kg 4hrs Rs. 7 Rs. 10 Rs. 4 Rs. 2 4000 3kg 3hrs Rs. 13 Rs. 10 Rs. 4 Rs. 2 5000 4kg 2hrs Rs. 8 Rs. 10 Rs. 4 Rs. 2 1500 Question 2: Prepare balance sheet from the following information: Current ratio 1.75 Quick ratio 1.25 Stock turnover ratio (cost of les/ Closing stock) 9 Gross profit ratio 25% Debt collection period 1.5 months Reserve and surplus to capital 0.2 Turnover to fixed assets 1.2 Capital gearing ratio (Long term debt to equity capital) 0.6 Fixed assets to net worth 1.25 Sales for the year Rs. 12,00,000 1. Rs. 96,750 (Maximum possible) 2. Balance sheet total Rs.11,00,000
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