The costs per unit of three products X, Y and Z are given below: Production arrangements are
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The costs per unit of three products X, Y and Z are given below:
Production arrangements are such that if one product is given up the production of the others can be raised by 50%. The directors propose that product Z should be given up because the contribution from the product is the lowest. Present suitable analysis of the data indicating whether the proposal should be accepted.
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Products Direct Material (Rs.) Direct Labour (Rs.) Variable Overheads (Rs.) Fixed Expenses (Rs.) Profit Selling Price (Rs.) No. of units produced X 20 12 8 6 Rs. 46 18 64 10,000 Y 16 14 10 6 46 14 60 5,000 782 18 12 6 4 40 12 52 8,000
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Product X Selling Price Rs 46 per unit Variable Cost per Unit Direct Material Direct Labour Variable ...View the full answer
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