LS2630: (a) A ball -bearing manufacturing company is planning to install an additional plant which will require leasing new equipment for a monthly payment of Rs. 60,000. Variable cost would be Rs. 20 per item and each item would retail for Rs. 70.

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Question: (a) A ball -bearing manufacturing company is planning to install an additional plant which will require leasing new equipment for a monthly payment of Rs. 60,000. Variable cost would be Rs. 20 per item and each item would retail for Rs. 70.

(i) How many ball-bearings must be sold in order to break even?

(ii)What could be the profit (or loss) if 1000 items are made and sold in a month?

(iii)How any item must be sold to realize a profit of Rs. 40,000?

(b)Some Japanese firms have a policy of rotating their managers among the different managerial jobs. In contrast, American, mangers are more likely to specialize in a certain area (e.g. finance or operations). Discuss the advantages and disadvantages of each of these approaches. Which do you prefer? Why?

 


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