•Given below are the details of cost of production of two products, A and B, manufactured by a company. Both the products use the same materials : A B •Percentage of total capacity utilised 60% 40% •Units produced 1,200 2,000 •Sales price per unit (Rs.) 2,000 1,200 Cost per unit (Rs.) •Raw materials 1,400 700 •Direct labour 200 150 •Variable expenses 180 230 Assuming that the fixed overheads of Rs. 3,00,000 remain unchanged, would you recommend increasing the capacity utilized on Product A to 70%? Do you have any alternative recommendation to make? A B •Percentage of total capacity utilised 60% 40% •Units produced 1,200 2,000 •Sales price per unit (Rs.) 2,000 1,200 Cost per unit (Rs.) •Raw materials 1,400 700 •Direct labour 200 150 •Variable expenses 180 230 Assuming that the fixed overheads of Rs. 3,00,000 remain unchanged, would you recommend increasing the capacity utilized on Product A to 70%? Do you have any alternative recommendation to make?
•Given below are the details of cost of production of two products, A and B, manufactured by a company.
Both the products use the same materials :
A B
•Percentage of total capacity utilised 60% 40%
•Units produced 1,200 2,000
•Sales price per unit (Rs.) 2,000 1,200
Cost per unit (Rs.)
•Raw materials 1,400 700
•Direct labour 200 150
•Variable expenses 180 230
Assuming that the fixed overheads of Rs. 3,00,000 remain unchanged, would you recommend increasing the capacity utilized on Product A to 70%? Do you have any alternative recommendation to make?
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