X Ltd manufactures three products in respect of which the following information is available:
|
Product |
Fine |
Superfine |
Deluxe |
|
Cost of Materials per unit |
100 |
16 |
124 |
|
Direct Skilled Labour per unit |
24 |
18 |
16 |
|
Direct Unskilled Labour per unit |
8 |
16 |
40 |
|
Variable Cost per unit |
132 |
50 |
180 |
|
Selling Price per unit |
240 |
140 |
200 |
Fixed overheads are budgeted at Rs. 6,00,000. Skilled labour is paid at the rate of Rs. 12 per hour and unskilled labour is paid at Rs. 6 per hour. The marketing manager has estimated the quantity of sales as follows at the current price.
|
Product |
Sales in Quantity |
|
Fine |
20,000 units |
|
Superfine |
28,000 units |
|
Deluxe |
12,000 units |
The availability of skilled labour is a constraint. Only 80,000 skilled labour hours would be available.
You are required to work out the optimum product mix and ascertain the profit/loss expected at that level of output.