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com 2 Notation 48. fevaluatian of the Order) Amantefuting company currently operating of Op hos aceived an order from which will be on of the capacity of the factory. The other hos o bother than in fonds below the curent domestle prices or repeted foto the Eurrent sales and cost sula are given beter Sales Direet Material Dieel Labour Variable Overhead Fixed Overheads The following alternatives os ovitable to the management (0) Continue with domestic sales and reject the export order. 16.00 h Botok 2.0 lakhs. 0.00 lakhs 25.20 lakhs (0) Accept the expert order and allow the domestic market to starve to the extent of excess of derrond ( Increase capacity so as to accept the export order and maintain the domestic demand by Purchasing additional plant and increasing 10% copacity and there by increasing foed overtech 65.000 and Working overtime at one and half time the normal rote to meet balance of the required copocis You are required to evaluate each of the above alternatives and suggest the best one Solution Statement showing computation of profit at different alternatives: (in Lakhs) Particulars 1 Present Sales 80% 16 40% - Foreign 60% - Domestic 19.2 (72 - 12) II 40% - Foreign 80% - Domestic 23.2 172+16) I. Sales () II. Variable Cost (3) 58 7.25 8.70 Direct Material (3) 2.4 Direct Labour () 3.00 3.60 0.6 Variable Overheads (R) 0.75 0.90 Overtime Premium () 0.15 8.80 11.00 13.35 Contribution (2) 720 8.20 9.85 IV Fixed Cost ) 5.20 5.20 5.85 (5.20 +0.65) V Profit 2.00 3.00 4.00 From the above computation, it was found that the profit is more at the ill alternative le. accepting the for order fully and maintaining the present domestic sales, it is the best alternative to be suggested