A manufacturer with an overall (interchangeable among the products) capacity of one lakh machine hours has been so far producing a standard mix of 15,000 units of Product A, 10,000 units of Product B...


A manufacturer with an overall (interchangeable among the products) capacity of one lakh machine<br>hours has been so far producing a standard mix of 15,000 units of Product A, 10,000 units of Product B<br>and C each. On experience the total expenditure exclusive of his fixed charges is found to be $ 2.09<br>lakhs and the cost ratio among the products approximates 1:1.5: 1.75 respectively per unit. The fixed<br>charges come to be $ 2.00 per unit. When the unit selling prices are $ 6.25 for A, $ 7.50 for B and $<br>10.50 for C he incurs a loss.<br>He desires to change the product mix as under:<br>Mix-1<br>Mіx-2<br>Міх-3<br>A<br>18,000<br>15,000<br>22,000<br>12,000<br>6,000<br>8,000<br>C<br>7,000<br>13,000<br>8,000<br>As a Cost Accountant what mix will you recommend ?<br>

Extracted text: A manufacturer with an overall (interchangeable among the products) capacity of one lakh machine hours has been so far producing a standard mix of 15,000 units of Product A, 10,000 units of Product B and C each. On experience the total expenditure exclusive of his fixed charges is found to be $ 2.09 lakhs and the cost ratio among the products approximates 1:1.5: 1.75 respectively per unit. The fixed charges come to be $ 2.00 per unit. When the unit selling prices are $ 6.25 for A, $ 7.50 for B and $ 10.50 for C he incurs a loss. He desires to change the product mix as under: Mix-1 Mіx-2 Міх-3 A 18,000 15,000 22,000 12,000 6,000 8,000 C 7,000 13,000 8,000 As a Cost Accountant what mix will you recommend ?

Jun 10, 2022
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