$\mathrm{}$A company is operating at $80\%$ capacity and has the following details: 

 

Sales Rs$\mathrm{.}12,80,000$

Costs:

Direct material Rs$\mathrm{.}4,00,000$

Direct labour Rs$\mathrm{.}1,60,000$

Variable overheads Rs$.80,000$

Fixed overheads Rs$\mathrm{.}5,20,000$ Rs$\mathrm{.}11,60,000$

Profit Rs$.1,20,000$

An export order has been received that would utilize half the capacity of the factory. The order has to be taken in full and executed at $10\%$ below the normal domestic prices or rejected totally. Should the company accept the order?

Answer rating: 100% (QA)

Current capacity utilization is 80 Additional capacity available is 20 of total capacity Export orde... View the full answer