The following set of information is presented to you by your client AB Ltd., producing two products
Question:
The following set of information is presented to you by your client AB Ltd., producing two products X and Y.
As a cost accountant, you are requested to present to the management of AB Ltd. the following:
(a). The unit marginal cost and unit contribution.
(b). The total contribution and the resultant profit from each of the above sales-mixes
(c). The proposed sales mixes to earn a profit of Rs. 300 and Rs. 600 with the total sales of X and Y being 300 units.
Transcribed Image Text:
1. Direct material per unit 2. Direct wages (per unit) 3. Fixed overhead during the period is expected to be Rs. 1,660 4. Variable overhead is allocated to products at the rate of 100% of direct wages 5. Sales price per unit 6. Proposed sales-mix (a) 100 units of X and 200 units of Y (b) 150 units of X and 150 units of Y (c) 200 units of X and 100 units of Y X (Rs.) 20 6 Rs. 40 Y (Rs.) 18 4 Rs. 30
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First lets calculate the unit marginal cost and unit contribution for both products X and Y Unit Marginal Cost X Direct Material Direct Wages Variable ...View the full answer
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