The image contains a problem involving two products (A and B) manufactured by X Ltd.,...

50.1K

Verified Solution

Question

Accounting

The image contains a problem involving two products (A and B) manufactured by X Ltd., with the data provided to calculate the price mix for maximum profitability, break-even point (BEP), and other financial metrics.
Heres a breakdown of the question:
I. Price Mix for Maximum Profitability
Product A:
Selling price per unit: 32,30,28
Demand: 900,1,000,1,500 units per month
8 labour hours per unit
Product B:
Selling price per unit: 22,20,18
Demand: 1,600,2,000,3,000 units per month
4 labour hours per unit
Cost Structure per Unit:
Product A:
Direct material: 4
Direct labour: 6
Variable overhead: 10
Total cost: 20
Product B:
Direct material: 3
Direct labour: 5
Variable overhead: 6
Total cost: 14
Fixed overheads: 32,400 per quarter
Factory capacity: 20,000 labour hours per month
You are required to compute the best price mix for maximum profitability based on these parameters. Q3 Answer the following:
X Ltd. manufictures and markets 2 products A and B, the demand in the market of which
fluctuates with the prices quoted. As a result of the deliberations of its recent Sales Cmnference
the following data were agreed upon as a working basis:
8 labour hours are required to produce product A and 4 labour hours to produce product B and
maximum cepacity of the factory is restricted to 20,000 labour hours per month.
The cost structure per unit of production is as under.
Fixed overheads are Rs.32,400 per quarter.
You are required to compute the possible combinations and arrive at a proper price mix for
maximum profitability.
II. If fixed costs are $4,000 variable costs $32,000 and break-even point $20,000. find: (i)
Profit-volume ratio; (ii) Sales; (iii) Net profit; (iv) Margin of safery:
III. From the following data, calculate break-even point (BEP):
If sales are 20% above BEP, determine the net protit.
image

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students