Instructions

Answer the questions based on the following information. In the following chart, the price of logs shown is per cubic metre that of plywood and saw timber is per tonne.

 

Question 27

If the volume sales of plywood, saw timber and logs were 40%, 30% and 30% respectively, then what was the average realisation in 1993 per cubic metre of sales? (Weight of one cubic metre of saw dust and plywood both = 800 kg)

Solution

In 1993, price of logs = Rs. 20 per cubic metre.

volume sales of plywood, saw timber and logs were 40%, 30% and 30% 

In 1993, price of plywood = Rs. 7 per tonne

In 1993, price of plywood = Rs. 20 per tonne

Weight of one cubic metre of saw dust and plywood both = 800 kg

1 tonne=1000kg

Price of 1000kg of plywood= Rs 7

Price of 800kg( 1 m$$^3$$)= 7 x 0.8 = Rs 5.6 per cubic metre. 

Price of saw timber = 20 x 0.8 = Rs 16 per cubic metre.

We know that the sales volume of plywood, saw timber and logs are in the ratio 4 : 3 : 3.
Thus, the average realization must be the weighted avg of these three-
$$\frac{(4\times 5.6)+(3 \times 16)+(3 \times 20)}{4+3+3}$$
=13.1
= Rs. 13 (Approximately)


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