ABC factory produces 24,000 units. Thecost sheetgives the following information:

Direct MaterialsRs. 1,20,000

Direct LabourRs.84,000

Variable overheadsRs.48,000

Semi variable overheadsRs.28,000

Fixed overheadsRs.80,000

Total CostRs.3,60,000

Presently the product is sold at Rs. 20 per unit.

The management proposes to increase the production by 3,000 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.

Q-1.What is present profit of the company ?

Q-2.What is proposed profit of the company in new market?

Q-3.What is a suggestion for new market proposal whether proposal accepts or not .