Due to industrial depression, a plant is running, at present, at 50% of its capacity. The following
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Due to industrial depression, a plant is running, at present, at 50% of its capacity. The following details are available.
An exporter offers to buy 5000 units per month at the rate of Rs. 650 per unit and the company hesitates to accept the offer for fear of increasing its already large operating losses.
Advise whether the company should accept or decline this offer.
Transcribed Image Text:
Direct material Direct labour Variable overhead Fixed overhead Production per month Total cost of production Sale price Loss Cost of production per unit Rs. 200 100 Rs. 300 200 800 20000 units Rs. 1,60,00,000 1,40,00,000 Rs. 20,00,000
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