Standard costs and other data for two component types used by Waves electronics are presented below: Type 1 Type 2 Rs. 3.00 Rs. 6.00 4.00 7.00 Rs.3.00 Rs. 20.00 lil- Direct materials A Direct materials B Direct labor Factory overhead Unit standard cost Units needed per year Machine hours per unit Unit cost if purchased 1.80 2.50 6.00- Rs. 13.30 8,000 4 Rs. 13.00 In past years, Waves electronics has manufactured all of its required components; however, in 2020 only 40,000 hours of otherwise Idle machine time can be devoted to the production of components. Accordingly, some of the component types must be purchased from outside suppliers. In producing various types, factory overhead is applied at Rs. 1.50 per standard machine hour. Fixed capacity costs, which will not be affected by any make-or-buy decision, represent 40% of the applied factory overhead. The 40,000 hours of available machine time are to be scheduled, so that Waves realizes maximum potential cost savings. Required: Change in total sales value New Breakeven Point Profit during the current year 10,000 2 Rs. 21.00 The relevant unit production costs to be considered in the make-or-buy decision to schedule machine time. (2) The units of type 1 and Type 2 that Waves should produce if the allocation of machine time is based on potential cost savings per machine hour. Question: 7 Last year, the sales of Diamond Paints were Rs. 500,000 with a C/M ratio of 60% and an M/S ratio of 30%. During the current year, a change in sales price and fixed cost resulted in C/M ratio of 25% and an M/S ratio of 40%. Required: j- Iv- V- Change in fixed cost Profit during last year.

In past years, Waves electronics has manufactured all of its required components; nowever, in 2020CnI, 40,000 hours of otherwise idle machine time can be devoted to the production of components. Accordindy, some of the component types must be purchased from outside suppliers. In producling various types, factory overhead is applied at Rs. 1.50 per standard machine hour. Fued capacity costs, which wili not be affected by any make-or-buy declsion, represent 40% of the applied factory overhead. The 40,000 hours of avalable machine time are to be scheduled, so that Waves realizes maximum potential cost savings. Requlred: (1) The relevant unit production costs to be considered in the make-or-buy decision to schedule machine time. (2) The units of type 1 and Type 2 that Waves should produce if the allocation of machine time is based on potential cost savings per machine hour. Question: 7 Last year, the sales of Dlamond Paints were Rs. 500,000 with a C/M ratio of 60% and an M/S ratio of 30%. During the current year, a change in sales price and fixed cost resulted in C/M ratio of 25% and an M/5 ratio of 40%. Bequiled: 1. Change in total sales value ii. New Breakeven Point ii). Profit during the current year Iv- Change in fixed cost v. Profit during last year