Follwing are the informations regarding a factory having production of 20,000 units:

Rs.

Cost of Production 1,00,000 Materials 1,00,000 Wages 20,000 Variables Overheads 20,000 Fixed Overheads 40,000 Budgeted Sale Price 16 p.u.

Wages are piece rate wages on casual basis, but fixed wages at Rs. 4,000 p.m. on account of D.A. are paid in addition to piece rate wage. Production proceeds for 6 months in this way, for the whole year and thus no economy in expenses was possible.

You are required to indicate the price at which production should be stopped.

[Ans.: Profit Rs. 14,000]