Question
A factory engaged in manufacturing plastic bottles is working at 40% capacity and produces 38,000 bottles per month. The present cost breaks up for one
A factory engaged in manufacturing plastic bottles is working at 40% capacity and produces 38,000 bottles per month. The present cost breaks up for one toy is as under. Material: Rs.10 Labour: Rs.3 Overheads: Rs.5 [60% fixed]
The selling price is Rs.50 per bottle. If it is decided to work the factory at 50% capacity, the selling price falls by 3%. At 90% capacity, the selling price falls by 5% accompanied by a similar fall in the price of material. You are required to prepare a statement showing the profits/losses at 40%, 50% and 90% capacity utilizations.
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