X Ltd. having a capacity of 1,50,000 units per year produces 1,00,000 units which are consumed in
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X Ltd. having a capacity of 1,50,000 units per year produces 1,00,000 units which are consumed in the home market at Rs. 20 per unit. The cost sheet (per unit) on the basis of this output is as follows:
A foreign customer who is interested in the product is willing to buy 50,000 units at a price of Rs.14 per unit.
Do you advise to accept the order? Support your decision with a suitable cost data. What will be your advice if (i) the new customer is not a foreign one and (2) if the price offered is Rs. 11.50 per unit.
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