Problem 1.53

Shiplon Products Ltd., manufactures 3 different products. The relevant data of these products are as under:


The Company has various alternatives for improving profitability as given below:

  1. To stop the production of Jelly and use the released capacity for producing Pomade. The machine for both the products are common. However, cream is produced on a special purpose machine.
  2. To export the total production of Jelly at current price. On export, the following additional revenue is expected:
    1. 8% Duty Drawback on export price.
    2. 12% Cash Compensatory Support against an export scheme of government.
    3. 5% Replenishment Licence which can be sold ...

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