Statement showing computation of contribution per machine hour and determination of priority for profitability SI. No 1 A 10 8 B 15 12 11 Particulars Selling price (3) Variable cost R) Contribution (R) Contribution per machine hour (*) Priority 2 IV 2/3 = 0.67 II 3 3/4 = 0.75 1 Statement showing optimum mix under given conditions and computation of profit at that mix SI. No. Total B 3,000 1 Particulars No. of units Contribution per unit() Total contribution (2) Fixed cost ) Profit A 2,600 2 5,200 11 3 9,000 III IV V 14.200 9.900 4.300 p25 Available hours 19,800 (-) Hours for B (3,000 x 4) 12,000 7.800 Units of A = 7,800 /3 = 2,600 Problem 33 Taurus Ltd. produces three products A, B and C from the same manufacturing facilities. The cost and other details of the three products are as follows: A B Selling price per unit) 200 160 100 Variable cost per unit() 120 120 40 Fixed expenses/month() 2.76.000 Maximum production per month (units) 5,000 8.000 6,000 Total hours available for the month 200 Maximum demand per month (units) 4,000 2,400 The processing hour cannot be increased beyond 200 hrs per month. You are required to: (a) Compute the most profitable product-mix. (b) Compute the overall break-even sales of the co., for the month based in the mix calculated in (a) above. 2.000