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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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