The cost per unit of the three products, A, B and C of a concern is as follows : A B C $ $ Direct Materials 10 8. Direct Labour 7 6. Variable Expenses Fixed Expenses 4 3 2 Total Cost Profit 23 23 20 7 Selling Price Number of units produced 32 30 26 10,000 5,000 8,000 Production arrangements are such that if one product is given up, the production of the others can be raised by 50%. The directors propose that C should be given up because the contribution in that case is the lowest. Do you agree ?
The cost per unit of the three products, A, B and C of a concern is as follows : A B C $ $ Direct Materials 10 8. Direct Labour 7 6. Variable Expenses Fixed Expenses 4 3 2 Total Cost Profit 23 23 20 7 Selling Price Number of units produced 32 30 26 10,000 5,000 8,000 Production arrangements are such that if one product is given up, the production of the others can be raised by 50%. The directors propose that C should be given up because the contribution in that case is the lowest. Do you agree ?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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