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N 09 of Alematres al Decision Making Effect on Operating Incone stores industriel Power Druis vehich are made by the use of components A (Electrical & Mechanical Components) and B How the following table shows the east of Plastic Housing separately from the cost of Electrical & Mechanical Particulars A Electrical & Mechanical Components B Plastic Housing CM A&B Industrial Drills 1,00,00,000 02200 is at 100 your heal Costs Direct Alateriat Direct Labour Variable Factory Overhead Other Variable Costs contribution Total Fared Costs Operating Income 44,00,000 5,00,000 49,00,000 4,00,000 3,00,000 7,00,000 1,00,000 2,00,000 3,00,000 1,00,000 1,00,000 Sales Commission at 10% of Sales 10,00.000 10,00,000 Total Variable Costs 60,00,000 10,00,000 70,00,000 30,00,000 22,20,000 4,80,000 27,00,000 3,00,000 waswer the following questions independently: During the year, a prospective customer offered 82,000 for 1,000 Drills. The Drills would be manufactured in addition to the 1.00,000 units sold. B Lid would pay the regular Sales Commission rate on the 1,000 Drills. The Chairman rejected the order because it was below our Costs". Calculate Operating Income of B Ltd, if it accepts the offer. A Supplier offers to manufacture the yearly supply of 100,000 units Plastic Housing Components for * 13.50 each. Assume that B Lid would avoid * 3,50,000 of the costs assigned to Plastic Housing if it purchases. Calculate the Operating income, if 6 Ltd decides to purchase the Plastic Housing from the Supplier Assuming that B Ltd could purchase 1,20,000 units (Plastic Housing Components) for 13.50 each and use the vacated plant capacity for the manufacture of Deluxe Version of Drill of 20,000 units (and sell them for 3 130 each in addition to the sales of the 1,00,000 regular units) at a Variable Cost of 90 each, excusive of Housings & exclusive of the 10% Sales Commission. All the Fixed Costs pertaining to the Plastic Housing would continue, because these costs are related to the manufacturing facilities primarily used. Calculate Operating Income of B Ltd, if it purchases the Plastic Housings & unufactures the Deluxe Version of Drills