Assuming you are the management accountant of this company, advice management on the most profitable mix.
A company produces two products (product A &B) and is currently planning its production mix for the next operating period. the maximum demand of product A is 2,000 units whiles that of product B is also 2,000 units however, the total raw materials required for producing both products is only 60,000kg. the estimated cost, sales and production data of the two products are given below;
product(A) Product(B)
Direct material:@GH¢10per Kg 240.00 140.00
Direct labor:@GH¢30 per hour 60.00 90.00
fixed overhead 20.00 20.00
variable overhead:@GH¢40 per hour 80.00 120.00
total cost per unit 400.00 370.00
Add profit 50.00 30.00
selling price per unit 450.00 400.00
Assuming you are the
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