solve both or skip

Illustration 4: A company is considering expansion. Fixed costs amount to rs.4,20,000 and are expected to increase by rs.1,25,000 when plant expansion is completed. The present plant capacity is 80,000 units a year. Capacity will increase by 50 percent with the expansion. Variable costs are currently rs.6.80 per unit and are expected to go down by re.0.40 per unit with the expansion. The current selling price is rs.16 per unit and is expected to remain the same under either alternative. What are the break- even points under either alternatives? Which alternative is better and why? 5.1.3.12 Case Analysis A small scale manufacturer produces an article at the operated capacity of 10,000 units while the normal capacity of his plant is 14,000 units. Working at a profit margin of 20% on sales realisation, he has formulated his budget as under: 10,000 units 14,000 units Rs. Rs. Sales realisation 2,00,000 2,80,000 Variable overheads 50,000 70,000 Semi-variable overheads 20,000 22,000 Fixed overheads 40,000 40,000 He gets an order for a quantity equivalent to 20% of the operated Capacity and even on this additional production profit margin is desired At the same percentage on sales realisation as for production to operated Capacity. As you are a cost manager, he approached you to advise him as To what should be the minimum price to realise this objective