Reprographics Ltd. manufactures a document-reproducing machine which has a variable cost structure as follows:

Sales during the current year are expected to be ₹13,50,000 and fixed overheads, ₹1,40,000.
Under a wage agreement, an increase of 10 per cent is payable to all direct workers from the beginning of the forthcoming year, while the material costs are expected to increase by 7.5 per cent, variable overhead costs by 5 percent, and fixed overhead costs by 3 per cent.
You are required to calculate:

(a) the new selling price if the current profit/volume ratio is to be maintained, and

(b) the quantity to be sold during the forthcoming year to yield the same amount of profit as the current year, assuming the selling price is to remain at ₹90.

Transcribed Image Text:

Material Labour Overheads Selling price 40 10 4 90