10 Nov Your company produces two products P and Q. The re
Your company produces two products P and Q. The relevant data per unit of output are given as follows: P (Rs.) Q (Rs.) Cost of Direct Material 28.00 13.00 Direct Labour 15.00 25.00 Variable Factory Overheads 25.00 12.50 Fixed Factory Overheads 10.00 5.00 Variable Selling Expenses 14.00 10.00 Total Cost 92.00 65.50 Selling Price 100.00 70.00 Profit 8.00 4.50Factory overheads are applied on the basis of machine hour. The existing plant and infrastructure will allow production and sale of either P or Q. Both the products are processed through the same production centre.You are required to suggest which product should be processed and sold.
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