Question
XYZ LTD produces three products and data is furnished: A B C SELLING PRICE 100 75 50 PV RATIO 10% 20% 40% MAXIMUM SALES POTENTIAL
XYZ LTD produces three products and data is furnished:
| A | B | C |
SELLING PRICE | 100 | 75 | 50 |
PV RATIO | 10% | 20% | 40% |
MAXIMUM SALES POTENTIAL | 40000 | 25000 | 10000 |
RAW MATERIAL CONTENT AS % OF VARIABLE COST | 50% | 50% | 50% |
The fixed expenses are estimated at Rs. 680000. The company uses a single raw material in all the three products.Raw material is in short supply& company has a quota for supply of Raw materials of the value of Rs 1800000 for the year for the manufacture of its products to meet its sales demand.
You are required to
1. Set a product mix which will give maximum overall profit keeping the short supply of raw materials in view.
2. Compute that maximum profit.
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