Find the product mix which will yield maximum profits.

Determine the most effective communication process to present the business to investors.
January 18, 2021
Calculate the minimum and maximum weekly sales units.
January 18, 2021

The following particulars are extracted from the records of a company.

 

Particulars Product A Product B

Sale price per unit Rs.100 Rs.120

Consumption of material 2kg 3 kg

Material cost Rs. 10 Rs. 15

Direct labour cost 15 10

Direct expenses 5 6

Machine hours used 3 2

Fixed overheads per unit Rs. 5 Rs. 10

Variable overheads per unit 15 20

 

Direct labour per hour is Rs.5. Comment on the profitability of each product [both

use same raw material] when,

 

J] total sales potential in units is limited

 

IJ] Total sales potential in value is limited

 

II] Raw material is in short supply

 

IV} production capacity [in terms of machine hours] is limited.

 

B] Assuming raw material as the key factor, availability of which is 10,000 kg and

maximum sales potential of each product being 3500 units, find out the product

mix which will yield maximum profits.

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