A company is producing two types of products Q and R simultaneously from input of raw material Z. Presently the company is producing 45,000 kgs of Q and 90,000 kgs of R from input of 1,35,000 kgs of raw material Z. The selling price of Q is Rs. 15 and that of R is Rs. 12 per unit. Processing cost per month is as follows:
| Rs. | |
| Raw Material (1,35,000 kgs @ Rs. 6 per Kg) | 8,10,000 |
| Variable Processing Cost | 5,40,000 |
| Fixed Processing Cost | 3,50,000 |
| Total | 17,00,000 |
A company has given an offer of purchase of 40,000 kgs of R additionally at a price of Rs. 9 per unit. Raw material is easily available in the market. The existing market of R will not be affected by accepting the offer, but price of Q is likely to be decreased uniformly on all sales.
Required
Calculate minimum reduced average price of Q to sustain the increased sales.
CAclubindia
