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GreenTech Ltd. has a maximum production capacity of 50,000 units per month. The cost structure is as follows: Particulars Activity Level 30,000 units () 40,000

GreenTech Ltd. has a maximum production capacity of 50,000 units per month. The cost structure is as follows:

Particulars

Activity Level

30,000 units (₹)

40,000 units (₹)

50,000 units (₹)

Direct Material


2,40,000

3,20,000

4,00,000

Direct Labour


3,00,000

4,00,000

5,00,000

Total Factory Overheads

Fixed

1,50,000

1,50,000

1,50,000

Total Factory Overheads

Variable

50,000

1,00,000

1,50,000

Requirements:

  1. Calculate the total cost for each activity level.
  2. Determine the cost per unit for each activity level.
  3. Compute the selling price per unit at 50,000 units if the desired profit is 25% on sales.
  4. Analyze the effect on total cost if the fixed overheads increase by 10%.

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