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The following set of information is presented to you by your client AB Ltd., producing two products X and Y. Direct Materials per unit
The following set of information is presented to you by your client AB Ltd., producing two products X and Y. Direct Materials per unit Direct Wages per unit X Y Rs.20 Rs.18 6 4 Fixed expenses during the period are expected to be Rs.1,600. Variable expenses are allocated to products at the rate of 100% of direct wages. Sales price (per unit): X - Rs.40; Y - Rs.30. Proposed sales mixes: (i) 100 units of X and 200 units of Y (ii) 150 units of X and 150 units of Y (iii) 200 units of X and 100 units of Y. You are required to present to the management of the company the following: (a) The unit marginal cost and unit contribution. (b) The total contribution and resultant profit from each of the above sales mixes. (c) The proposed sales mixes to earn a profit of Rs.300 and Rs.600 with the total sales of X and Y being 300 units.
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