Zed Manufacturing Ltd. produces three different types of specialized products namely X, Y and Z. The following information has been collected from…

CA Intermediate · Cost and Management Accounting · PYQS · January 2026
Zed Manufacturing Ltd. produces three different types of specialized products namely X, Y and Z. The following information has been collected from their books of accounts for the year ended March 2025: Particulars Products X Y Z Sales (in ₹) 40,00,000 23,80,000 16,20,000 Selling Price per unit (in ₹) 500 700 400 Variable Cost per unit (in ₹) 250 420 240 Total fixed costs:18,00,000 Zed Manufacturing Ltd. is currently discussing proposals to maintain a sales mix ratio, to discontinue the manufacturing of Product Z and replace it with a new product - Product W in anticipation of following results: Particulars Products X Y W Sales Mix Ratio 55% 30% 15% Selling Price per unit (in ₹) 500 700 500 Variable Cost per unit (in ₹) 250 420 250 Total fixed costs:18,80,000 Total sales:85,00,000 Based on the above, you are required to calculate the following (MCQ 1 to 5):
(A) 37.5%
(B) 40%
(C) 32.5%
(D) 45%

Suggested Answer and Working Notes:

Correct Answer: Option (D)

45%

Topics: Marginal Costing

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