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Question:
Vinak Ltd., which produces three products provides you the following data for 2008-2009.
Products A B C Selling price per unit (£.) 100 75 50 Profit volume ratio (%) 10 20 40 Maximum sales potential (units) 40,000 25,000 10,000 Raw material content as percentage of variable costs (%) 50 50 50
The fixed expenses are estimated at £ 680,000. The company uses a single raw material in all the three products. Raw material is in short supply and the company has a quota for the supply of raw materials of the value of £ 1,800,000 for the year 2008-2009 for the manufacture of its products to meet its sales demand.
Required:
i) set a product mix which will give a maximum overall profit keeping the short supply of raw materials in view.
(ii) compute the maximum profit.
Journalize the entries to record the receipt of the amounts due on Notes (5) and (6) in January. Date Face Amount Term Interest Rate 5. Nov. 15 $54,000 60days 6% 6. Dec. 27 $40,500
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