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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