LS2477: A factory, engaged in manufacturing plastic buckets is working at 40% capacity and produces 10,000 buckets per month. The present cost break-up for one bucket is as under:

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Question: A factory, engaged in manufacturing plastic buckets is working at 40% capacity and produces 10,000 buckets per month. The present cost break-up for one bucket is as under:

The selling price is the Rs.40 per bucket.

If it is decide to work the factory at 50% capacity, the selling price falls by 3%. At 90% capacity, the selling price falls by 5% accompanied by a similar fall in the price of materials.

You’ve required to prepare a statement showing the profits at 50% and 90% capacities. Also determine the break-even point at each of these production

 


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