A company engaged in plantation activities has 400 hectares of virgin land which can be used for growing jointly or individually tea, coffee and cardamom. The yield per hectare of the different crops and their selling price per kg are as follows:
|
Yield (kgs)/Hectare |
Selling Price (Rs.) |
|
|
Tea |
2000 |
40 |
|
Coffee |
500 |
80 |
|
Cardamom |
100 |
500 |
Cost data:
|
(a) Variable Cost by kg. |
Tea (Rs) |
Coffee (Rs.) |
Cardamom (Rs.) |
|
Labour Charges |
I6 |
20 |
240 |
|
Packing costs |
4 |
4 |
20 |
|
Other costs |
8 |
2 |
40 |
|
Total cost |
28 |
26 |
300 |
(b) Total fixed cost per annum is Rs. 62,00,000.
You are required to calculate (i) the priority of production and (ii) the most profitable product mix, if the policy of the company for maximum and minimum usage of cultivation will be:
|
Max. Area (Hectare) |
Min. Area |
|
|
Tea |
320 |
240 |
|
Coffee |
100 |
60 |
|
Cardamom |
60 |
20 |