Scenario 1: By varying quantity of product F

Cash available: 10000

Expenditure on Raw material: 7225
Cash Left: 2775

Increased demand for product F: 10
Per unit cost of raw material for F: 65
Total cost for product F 10 units: 650

Cash remaining: 2775 - 650 = 2125

Product Units
Increased
Unit
Unit Price
Sales of
extra units
Sales of
extra units
A 75 35 180 6300 2275
D 55 5 240 1200 475
F 40 0 180 0 0
Total 7500 2750

Net Profit 4750






Scenario 2: By varying quantity of product D


Cash available: 10000
Expenditure on Raw material: 7225
Cash Left: 2775

Increased demand for product D: 05
Per unit cost of raw material for D: 95
Total cost for product D 05 units: 475

Cash remaining: 2775 - 475 = 2300



Product Units
Increased
Unit
Unit Price
Sales of
extra units
Sales of
extra units
A 72 32 180 5760 2080
D 50 0 240 0
F 50 10 180 1800 650
Total 7560 2730

Net Profit 4830


Based on net profits from both the scenario we can say that product mix in both scenario will result in
higher profits and higher machine utilization.
Per unit cost of raw material for Product A 65


No of A units that can be produced: 2125 / 65 = 32 units of A
Per unit cost of raw material for Product A: 65


No of A units that can be produced: 2300 / 65 = 35 units of A