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The following particulars are extracted from the records of a Hero motor company: PER UNIT PRODUCT Sales Consumption of material Material cost Direct wages
The following particulars are extracted from the records of a Hero motor company: PER UNIT PRODUCT Sales Consumption of material Material cost Direct wages cost Direct expenses Machine hours used Overhead expenses are: PRODUCTPRODUCT A B sales 50 60 kg 1 1.5 Rs 5 7.5 Rs 7.5 5 Rs 2.5 hours 1.5 1 Fixed Rs 2.5 5 Variable oh Rs 7.5 10 Direct wages per hour Rs 2.5 2.5 (a) Comment on profitability of each product. (b) Assuming raw material as the key factor, availability of which is 5000 Kgs. and each product cannot be sold more than 3,500 units find out the product mix which will yield the maximum profit.
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