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A company makes two products, X and Y, which are sold in the ratio 1:2. The selling price are $50 and $100 respectively. The company wants to earn $100,000 over the next period. What should the sales budget be?
Ans) X 400 units and Y 800 units.I assume that the question makes it clear that they want the revenue to be $100,000 (and not for the profit to be $100,000).
If they sell x units of product X then they will sell 2x units of product Y.
So the total revenue will be 50x from product X and 200x from product Y, so a total of 250x.
Given that we want the total to be $100,000, we now know what the value of x is.
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