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.29 (Quoting for an export order). Somesh of Agra presently operates its plantat 80% of the normal capacity to manufacture a product only to meet
.29 (Quoting for an export order). Somesh of Agra presently operates its plantat 80% of the normal capacity to manufacture a product only to meet the demand of Government of Tamil Nadu under a rate contract. He supplies the product for Rs. 4,00,000 and earns a profit margin of 20% on sales realisation. Direct cost per unit is constant. The indirect costs as per his budget projections are : Indirect costs 20,000 units 22,500 units 25,000 units (80% capacity) (90% capacity) (100% capacity) Variable Rs. 80,000 Rs. 90,000 Rs. 1,00,000 Semi-variable 40,000 42,500 45,000 Fixed 80,000 80,000 80,000 He has received an export order for the product equal to 20% of its present operations. Additional packing charges on this order will be Rs. 1,000. Arrive at the price to be quoted for the export order to give him a profit margin of 10% on the export price
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