International Brands Ltd. Is operating at 70% capacity and producing 3,150 pieces of product A. The cost of production for the month of August 2012 was:

Rs.

Direct Material 54,000

Direct wages 8,100

Variable Overheads 9,900

Fixed Overheads 18,000

The products are currently sold at an average price of Rs. 72.

A tender for supply of 900 pieces per month has been received. To submit tender the following information has been ascertained.

Variable Overheads attributable to various activity level is:

% Per month Rs.

50 8,280

60 9,900

70 11,520

80 13,500

90 15,300

100 16,920

Required:

(a) Calculate the bidding price which will yield a 25% profit based on sales price.

(b) Prepare a statement showing the effect on the monthly profit if the companys tender is accepted.