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The following particulars are extracted from the records of a Hero motor company: PER UNIT PRODUCTPRODUCT PRODUCT Sales sales 50 60 Consumption of material kg 1.5

The following particulars are extracted from the records of a Hero motor company: PER UNIT PRODUCTPRODUCT PRODUCT Sales sales 50 60 Consumption of material kg 1.5

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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The following particulars are extracted from the records of a Hero motor company: PER UNIT PRODUCTPRODUCT PRODUCT A Sales sales 50 60 Consumption of material kg 1 1.5 Material cost Rs 7.5 Direct wages cost Rs 7.5 Direct expenses Rs 2.5 3. Machine hours used hours 1.5 Overhead expenses are : Fixed Rs 2.5 Variable oh Rs 7.5 10 Direct wages per hour Rs 2.5 2.5 (a) Comment on profitability of each product. (b) Assuming raw material as the key factor, availability of which is 5000 Kgs. and each product cannot be sold more than 3,500 units find out the product mix which will yield the maximum profit.
Transcribed Image Text:The following particulars are extracted from the records of a Hero motor company: PER UNIT PRODUCTPRODUCT PRODUCT A Sales sales 50 60 Consumption of material kg 1 1.5 Material cost Rs 7.5 Direct wages cost Rs 7.5 Direct expenses Rs 2.5 3. Machine hours used hours 1.5 Overhead expenses are : Fixed Rs 2.5 Variable oh Rs 7.5 10 Direct wages per hour Rs 2.5 2.5 (a) Comment on profitability of each product. (b) Assuming raw material as the key factor, availability of which is 5000 Kgs. and each product cannot be sold more than 3,500 units find out the product mix which will yield the maximum profit.
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