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 Dear prathasarathy,

the yield of A1 will be 12500 tons [250*50] for calculation of part i) for part ii) but the question said that if they go for optional growing i.e. B1 and B2 the they should atleast produce 2000 tons of A1 and A2 as its minimum or say compulsory to produce that much to satisfy market demand....

this is what i understood.....i may be wrong also....

if i am wrong then please correct me....i'll also get to learn correct thing....

Dear Shruti,

The problem says that the land used for B1 and B2 cannot be used for A1 and A2 and vice versa.Further it says that the company must produce 2000 tons of A1 and A2 each and 1800 tons of B1 and B2 each in order to provide adequate market service.

 A question of production mix to fullfill something will come only when there is a constraint.

In the given problem the area occupied by all products with respective yield is more than sufficent  to cover market requirements.

That is why i have a doubt as to whether any info about constraint/key factor in the problem is missing.

If my perception is wrong kindly rectify me.

 Dear Prathasarathy,

in question it is given as follows

The land that is being used for the production of B1 and B2 can be used for either crop, but not for A1 and A2. The land that is being used for A1 and A2 can be used for either crop, but not for B1 and B2. In order to provide adequate market service, the company must produce each year at least 2000 tons of A1 and A2 and 1800 tons of B1 and B2

You are required to :

(i) Prepare a statement of the profit for the current year.

(ii) Profit for the production mix by fulfilling market commitment

Explanation  :-

the land that is used for production of B1 and B2 can only be used to produce B1 or B2 and not for A1 and A2,similarly land for A1 and A2 and be used for either A1 or A2 only not for B1 or B2.

so we have to consider 12500 that is production of current year for calculation of (i) and minimum market demand to find optimum product mix for (ii)

so as per my knowledge goes we can see that product B1 and B2 are more profitable that A1 and A2 so we can produce the most profitable in whole area and the minimum market demand of others....for example if B2 is most profitable then we can produce maximum of B2 and remaining upto minimum market demand.

i have tried to help you...if i am not able to explain it properly please forgive me...as this is what i understood during exam hrs and what i did in paper....if i am wrong please rectify me....

Dear Shruti,

Thanks for your detailed explanation.

I got your point.

So for (ii)  between A1 and A2 if A1 is profitable then A2 will be produced only to the extent of market requiremnt and the balance will be A1 in order to maximise profit.

this is similar between B1 and B2.

Once again thanx a lot yaar.

At my best speed and maximum level, i afforded to attempt only for 65.

70 only...

70

 FUN was really a tragedy. I attended only for 65 marks. Lengthy paper.

Lenghty paper friends. I was able to attempt only  70. I left Q1 due to lack of time. F.M. was good. Capital Budgeting question took almost 25 minutes. Theory was a bit different than usual. But i managed to write something in it.

Dekhte hain kya hota hai...

 me only 70 marks

lenthy with difficult questions

A human being cannot attempt more than 65-70 marks in costing.Because the question paper was not set by human beings. I already cleared 2nd group so i didnt write 2nd grp but even if i have written i would not have attended more than 60 marks. But dont worry. With steps and working notes even though u dont get answers right, you can manage with 40-45. I am certain about it