X Ltd manufactures three products in respect of which the following information is available:
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X Ltd manufactures three products in respect of which the following information is available:
Product
Fine
Rs.
Superfine
Rs.
Deluxe
Rs.
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.
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