5: Fashion Galore manufactures ladies' wear. It planned to sell maxi skirts in one year at a price of Rs. 100 each, the cost of which is Rs. 60 each. During the year, out of the manufactured 10,000 skirts, only 6,000 were sold. Fashion has now changed and so it is not possible to sell the remaining stock. The sales manager finds two alternative courses of action. The skirts can be restyled as mini-skirts or they can be sold as rejects. Cost of restyling will be Rs. 2,00,000 and it is forecasted that the mini skirt can be sold for Rs. 80 each while the scrap value of the off cuts will be Rs. 30,000. If the company decides to sell the stock as rejects, the resulting proceeds will be Rs. 80,000. Required: a. Expected profit/loss of Fashion Galore if they go for restyling of maxi skirts b. Expected profit/loss of Fashion Galore if they sell the stock as rejects c. What will be your advice to the sales manager? (2.5+1.5+0.5 4.5 marks) =