The following particulars are extracted from the record of a company. Product A Product B ( Per unit) ( Per unit) 100 120 Selling price (Rs.) Consumption of raw materials (Kg) Direct Wages Cost (Rs.) Direct Expenses(Rs.) 2 3 15 10 5 6 Overhead Expenses Fixed (Rs.) Variable (Rs.) 5 10 15 20 Raw material cost per Kg is Rs. 5/=. Assume raw materials as the limiting factor, availability of which is 10,000 Kg per month. If maximum sales potential of each product is 3,500 units per month, find out the product mix which will maximize the company profit. Also, determine the profit that will be earned at the above product mix.

The following particulars are extracted from the record of a company. Product A Product B ( Per unit) ( Per unit) 100 120 Selling price (Rs.) Consumption of raw materials (Kg) Direct Wages Cost (Rs.) Direct Expenses(Rs.) 2 3 15 10 5 6 Overhead Expenses Fixed (Rs.) Variable (Rs.) 5 10 15 20 Raw material cost per Kg is Rs. 5/=. Assume raw materials as the limiting factor, availability of which is 10,000 Kg per month. If maximum sales potential of each product is 3,500 units per month, find out the product mix which will maximize the company profit. Also, determine the profit that will be earned at the above product mix.

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter5: Process Costing

Section: Chapter Questions

Problem 1PA: The following product Costs are available for Haworth Company on the production of chairs: direct...

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