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X Y Ltd. Is manufacturing three household products A,B and C, selling them in a competition market. Details of current demand ,selling price and cost

X Y Ltd. Is manufacturing three household products A,B and C, selling them in a competition market. Details of current demand ,selling price and cost structure are given below:

A

B

C

Expected demand (units)

10,000

12,000

20,000

Selling price per unit (Rs)

20

16

10

Variable cost per unit (Rs)

Direct materials (Rs. 10/kg)

6

4

2

Direct labour (Rs. 15/hr)

3

3

1.50

Variable overheads

2

1

1

Fixed overhead per unit (Rs)

5

4

2

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: Raw material available will be only 12,100 kg.

Suggest the best production plan in each case and the resultant profit that the company would earn according to your suggestion.

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