Direct wages (b) SV Ltd., has budgeted the manufacture of 30,000 units of its only product 'A' for the next quarter. The capacity of the factory has not been fully utilised. The variable cost per unit of Product 'A' is as under: Direct materials Rs. 48.00 Direct wages (Rs. 4 per hour) 36.80 Factory variable overheads 27.60 Selling overheads variable 18.00 Production A sold at Rs. 200 per unit. Fixed overheads for the quarter Rs. 15,00,000. At present the company manufactures component 'P', one unit of which is used in each unit of product A. The cost of this component is already included in the cost structure of Product A as aforesaid. Anyhow the cost per batch of 1,000 units of the component 'P' is separately supplied as under: Direct materials Rs. 6,000 4,800 Factory variable overheads 3,600 Fixed overheads apportioned to the component 3.600 Total costs 18.000 It is proposed to utilize the spare capacity by manufacture of 1,500 units of Product 'B' for export. The details are as under: Export selling price Rs. 228 per unit Direct material cost 80 per unit Direct labour 16 hours per unit Variable selling expense applicable to this product is Rs. 20 per unit. Factory variable overheads have to be charged, calculated on the basis of Direct Labour Hour Rale applicable to Product A. It has to be noted that component P is not used in the manufacture of Product B. Your are required to: (i) Present a statement showing the profit as originally envisaged in the Budget. (ii) State whether component P should be manufactured or bought from the market if this can be procured at a price of Rs. 16 per unit