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Problem:

A company produces three products and is reviewing the production and sales budgets for the next accounting period. The following information is available for the three products:

 

  Product X

Product Y

Product Z

Contribution per unit

Rs 12 

Rs 10 

Rs 6

 

Machine hours required per unit 

6 hours 

2 hours 

1 hour

 

Estimated sales demand

200 units

200 units

200 units

Required machine hours

1200 hours

400 hours

200 hours

Machine capacity is limited to 1200 hours for the period and is insufficient to meet total sales demand. 

You have been asked to advice as to which products should be produced during the period.

Managerial Accounting, Accounting

  • Category:- Managerial Accounting
  • Reference No.:- M97260

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