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Question

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.

What will be the contribution mix of Deepak Ltd, if for every five units of T-Shirts sold, six units of shirts are sold?

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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