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.
    A Rs.1400 Correct Answer Incorrect Answer
    B Rs.7000 Correct Answer Incorrect Answer
    C Rs.7420 Correct Answer Incorrect Answer
    D Rs.7980 Correct Answer Incorrect Answer
    E Rs.8400 Correct Answer Incorrect Answer

    Solution

    Contribution = Sales price – variable cost Contribution per unit:

    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
    Sales mix = 5 t-shirts and 6 shirts Contribution mix = 5*420 + 6*980 = 2100 + 5880 = Rs.7980

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