What is the price at which the business would need to sell product Y such that it would be equally profitable to produce and sell any one of the three products?
- hravani plc has three products all of which require the same production facilities.
Financial data on the three products are as follows:
|
PRODUCT |
X |
Y |
Z |
|
|
£ per unit |
£ per unit |
£ per unit |
|
|
|
|
|
|
Labour: skilled |
10 |
15 |
20 |
|
Labour: unskilled |
3 |
6 |
3 |
|
Materials |
9 |
12 |
15 |
|
Variable |
8 |
12 |
16 |
|
Share of Fixed Overheads |
10 |
15 |
20 |
All three of the products use just one raw material, which is the same material for all three products. This material costs £12 a kilo and is scarce.
The company has adequate production capacity to satisfy the market demand for all three the products.
All labour is a variable cost.
Product X is sold in a market where the selling price per unit is fixed at £60.
What is the price at which the business would need to sell product Y such that it would be equally profitable to produce and sell any one of the three products?
- £85
- £94
- £124
- £104
- hravani plc has three products all of which require the same production facilities.
Financial data on the three products are as follows:
PRODUCT
X
Y
Z
£ per unit
£ per unit
£ per unit
Labour: skilled
10
15
20
Labour: unskilled
3
6
3
Materials
9
12
15
Variable Overheads
8
12
16
Share of Fixed Overheads
10
15
20
All three of the products use just one raw material, which is the same material for all three products. This material costs £12 a kilo and is scarce.
The company has adequate production capacity to satisfy the market demand for all three the products.
All labour is a variable cost.
Product X is sold in a market where the selling price per unit is fixed at £60.
What is the price at which the business would need to sell product Y such that it would be equally profitable to produce and sell any one of the three products?
- £85
- £94
- £124
- £104
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