A factory produces 24000 units. The cost sheet gives the following information: The product is sold at
Question:
A factory produces 24000 units. The cost sheet gives the following information:
The product is sold at Rs. 20 per unit. The management proposed to increase the production by 3000 units for sales in the foreign market. It is estimated that semi-variable overheads will increase by Rs. 1,000. But the product will be sold at Rs. 14 per unit in the foreign market. However, no additional capital expenditure will be incurred. The management seeks your advice as cost accountant. What will you advise them?
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To advise the management on whether they should increase production by 3000 units for sales in the foreign market we need to perform a costvolumeprofi...View the full answer
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