a company has compiled the following data for the preparation of its budget for the 626364

A company has compiled the following data for the preparation of its budget for the year 2008-09

Particulars	Product A	Product B	Product C
Sale per month – units	8, 000	4, 000	6, 000
Selling Price	Rs.40 per unit	Rs.80 per unit	Rs.100 per unit
Direct Materials	Rs.20 per unit	Rs.48 per unit	Rs.40 per unit
Direct Labour: Department 1 Rs.5 per hour Department 2 Rs.4 per hour	5	10	20
Variable Overheads	8	4	12
Fixed Overheads: Rs.1, 50, 000 per month	Rs.3 per unit	Rs.3 per unit	Rs.7 per unit

After the budget was discussed, the following action plan was approved for improving the profitability of the company.

I] Direct labour in department 1, which is in short supply should be increased by 15, 000 hours by spending fixed overheads of Rs.8, 000 per month.

II] To boost sales, an advertisement program should be launched at a cost of Rs.10, 000 per month.

III] The selling price should be reduced by: A: 2.5%, B: 8.75%, C: 1%

IV] The sales target have been increased and the sales department has confirmed that the company will be able to achieve the following quantities of sales.

A: 12, 000 units, B: 6, 000 units, C: 10, 000 units