Question
What will be the contribution mix of Deepak Ltd, if for
every five units of T-Shirts sold, six units of shirts are sold? Refer to the following information to answer the next 4 questions (Q5 to Q8) Deepak Ltd produces and sells two products – shirts and trousers. The details of the 2 products are as under: Product T-Shirt Shirt Sales price per unit Rs.800 Rs.1400 Variable Cost per unit Rs.380 Rs.420 Deepak Ltd’s fixed costs are Rs.43,89,000 per period.Solution
Contribution = Sales price – variable cost Contribution per unit:
Sales mix = 5 t-shirts and 6 shirts Contribution mix = 5*420 + 6*980 = 2100 + 5880 = Rs.7980 Product T-Shirt Shirt Sales price per unit Rs.800 Rs.1400 Variable Cost per unit Rs.380 Rs.420 Contribution per unit Rs.420 Rs.980
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