The following particulars are obtained from the records of a company manufacturing two products P and R:
|
Per unit |
||
|
Product P (Rs) |
Product R (Rs) |
|
|
Selling price |
250 |
500 |
|
Material cost (Rs 20 per kilogram) |
40 |
100 |
|
Direct wages (Rs 6 per hour) |
60 |
120 |
|
Variable overheads |
20 |
40 |
|
Total fixed overhead = Rs 10,000 |
||
Comment on the profitability of each product when production capacity in hours is the limiting factor.