correct answer

x 100 Capacity Utilisation = =875% 4,00,000 Q.13. The challenger Ltd. manufactures garments all cut pieces a cloth are used to manufacture dolls. Following in the cost statement : Readymade Garments Dolls Total Rs. Rs. Rs. Materials 1,60,00 12,000 1,72,000 Labour 26,000 2,400 28,400 Variable Overheads 34,000 5,600 39,600 Fixed Overheads 48,000 6,000 54,000 Total Cost 2,68,000 26,000 2,94,000 Sales 3,40,000 24,000 3,64,000 Profit (+) Loss (-) + 72,000 - 2000 + 70,000 The cut piece used in the manufacture of Dolls have a scrap of Rs. 4000 As there is a loss of Rs. 2000 in dolls manufacturing, it is suggested t discontinue its manufacture. Advice the management