assuming raw material is the key factor availability of which is 20 000 kgs and the 608741

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The following particulars are extracted from the records of a company:

	Product X Don't use plagiarized sources. Get Your Custom Essay on assuming raw material is the key factor availability of which is 20 000 kgs and the 608741 Get an essay WRITTEN FOR YOU, Plagiarism free, and by an EXPERT! Just from $10/Page Order Essay	Product Y
Sales per unit	Rs. 200	Rs. 240
Consumption of material	2 kgs	3 kgs
Material cost	Rs. 20	Rs. 30
Direct wages cost	Rs. 30	Rs. 20
Direct expenses	Rs. 10	Rs. 12
Machine hours used	3	2
Overhead expenses:
Fixed	Rs. 10	Rs. 20
Variable	Rs. 30	Rs. 40
Direct wage per hour is Rs. 10.

Comment on the profitability of each product (both use the same raw material) when
1. Total sales potential in units is limited.
2. Total sales potential in value is limited.
3. Raw material is in short supply.
4. Production capacity (in terms of machine hours) is the key factor.
Assuming raw material is the key factor, availability of which is 20,000 kgs and the maximum sales potential of each product being 7,000 units, find the product mix which will yield the maximum profit.

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