LS2465: A toy manufacturer earns an average net profit of Rs.3 per piece with a selling price of Rs.25 by producing and selling 60,000 pieces at 60% of the potential capacity. Composition of his cost is as follows:

$1.99

SKU: 3989ac162e42 Category:

Downloadable Assignment Solution

Buy this solution and download mba assignment solution instantly after secured paypal payment.

Question: A toy manufacturer earns an average net profit of Rs.3 per piece with a selling price of Rs.25 by producing and selling 60,000 pieces at 60% of the potential capacity. Composition of his cost is as follows:

Direct material Rs.4

Direct wages Rs.1

Works overhead Rs.6 (50% fixed)

Sales overhead Rs.1 (25% variable)

During the current year he intends to produce the same number but anticipates that:

(a) his fixed charges will go up by 10%

(b) rates of direct labour will increase by 20%

(c) rates of direct material will increase by 5%

(d) selling price cannot be increased.

Under these circumstances he obtains an order for a further 20% of his capacity. What minimum price will you recommend for accepting the order to ensure that the manufacturer gets an overall profit of Rs. 1,80,500?

 


Complete MBA Assignments Solution

You can buy complete assignment solution. Visit yours university link from top menu and buy online. You can also post your assignment requirement through email, so our expert assignments tutor will solved your problem.

Become Premium Member

30 Days Validity – Rs. 2,000/- Only. Buy MBA Assignment Membership.

3 Months Vailidy – Rs. 5,000/- Only. Buy MBA Assignment Membership.

1 Year Validity – Rs. 10,000/- only. Buy MBA Assignment Membership.

Study Link

You can study this assignment question from this link. Visit Now for MBA Assignment

Answer Blurr Actual Answer after purchase