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Particulars
Sales Price
Product A
product B
Rs
Rs
20
10
Variable Cost
Fixed Cost
8
4
Sales Demand
6
3
2,000 Units
3,000 Units
There are only 7,000 machine hours available, and product A requires 4 machine
hours per unit and Product B requires 1 machine hour per unit.
Required;
Calculate the profit maximizing production and sales mix.
Q2. The company makes two components , A and B, for which costs in the next year
are expected to be as follows
Particulars
Productions (units)
30,000
20,000
Rs
Rs
Direct material
Direct labour
Variable Production OH
9
1
Direct labour is paid Rs 12 per hour. There will be only 19,500 hours of direct labour
time available next year and any additional componets must be purchased from an
external supplier.
40,000
50,000
30,000
An external supplier has offered to supply units of A for Rs 12.5 and units of B for Rs
23.
Required;
Determine the units the company should make and buy.