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3. Answer the following questions (3.1) and (3.2) using the following information: TLC Pvt. Ltd. estimates it will produce 30,000 units of thermostat that it sells at a price of Rs. 200. Current internal capacity permits for a maximum of 50,000 units. It currently produces all its requirements internally but is considering outsourcing this activity. The production manager has prepared the following information concerning the internal manufacture of 30.000 units of the product: The fixed overhead of Rs 60 per unit includes a Ks 15 per unit anocation ive sala y paru to a supervisor to oversee production of the part and Rs. 12 per unit for the marketing and distribution cost. (consider each of the following options independent of each other). 3.1. TLC has received an export order of 80,000 units at a sales price of Rs. 210 . Even TLC will continue use its full capacity level it will be still fall short by 30,000 units to meet the export order requirement. TLC is considering manufacturing by full capacity and outsource the remaining from an external supplier to meet the export order. TLC can outsource the excess requirement at a price of Rs. 160 per unit. Apart from the existing variable cost, TLC has to incur a per unit logo printing and brand tagging cost of Rs. 12 per unit as desired by the export order. TLC has to incur an additional warehouse expense of Rs. 20000 charged by Port Trust of India for using their warehouse facility near the port. Should the export order be accepted? If TLC do not accept the export order and only uses the full internal production capacity for manufacturing and selling the product in the domestic market will there be any difference in profit under the two strategy? Support your answer with detail calculation. 3.2. Due to the slowdown in general economy and higher inflation the input material cost will go up by 20% in near future. Labour cost is also expected to go up by 10%. Due to decline in demand the variable marketing cost is expected to go up by 10%. Due to decline in demand in the of household electronics industry there is also substantial decline in demand for the thermostat product of TLC. To continue to exist in the market TLC has also to cut down its sells price by 5%. During such troubled times there is also increasing pressure from the financers to shut down the business. Under such environment would you suggest TLC to shut down its business completely? Support your answer with detail calculation and reason