From the following information, state which of the alternative sales mixes you would recommend to the management and why:
|
|
Product R |
Product S |
|
Selling Price per unit (Rs.) |
25 |
20 |
|
Direct Materials per unit (Rs.) |
8 |
6 |
|
Direct Wages |
24 hours @ |
16 hours @ |
|
25 paise per hour |
25 paise per hour |
Fixed overheads — Rs. 750; Variable overheads — 150% of direct wages.
Alternative sales mix:
- 250 units of R and 250 units of S.
- Nil units of R and 400 units of S.
- 400 units of R and 100 units of S.