Question $2(25$ marks$)$

Aristo Ltd manufactures three products A$,$ B and C$,$ and operates in a highly

competitive market. Details of current demand, selling price and cost structure of the

three products are as follows:

The company is frequently affected by acute scarcity of raw material and high labour

turnover.

During the next period it is expected to have one of the following situations:

$($a$)$ Raw materials available will be only $24,200kg.$

$($b$)$ Direct labour hours available will be only $10,000hrs.$

$($c$)$ It may be possible to increase sales of any one product by $25\%$ without any

additional fixed costs but by spending Rs$.40,000$ on advertisement. There will

be no shortage of materials or labour.

Required:

For each of the scenario above, suggest the best production plan in each case and the

resultant profit that the company would earn according to your suggestion.

$[19$ marks$]$