Question $2$: ABC Ltd$.$ manufactures a single product for which market demand exists for

additional quantity. Present sales of Rs$.60,000$ per month utilize only $60\%$ capacity of the plant.

Sales Manager assures that with a reduction of $10\%$ in the price, he would be in a position to

increase the sales by about $25\%$ to $30\%.$ The following data are available.

Selling price: Rs$.10$ per unit

Variable cost: Rs$.3$ per unit

Semi variable cost: Rs$\mathrm{.}6,000$ fixed plus Rs$.0\mathrm{.}50$ per unit

Fixed cost: Rs$\mathrm{.}20,000$ at present level estimated to be Rs$.24,000$ at $80\%$ output.

You are required to:

Prepare a statement showing the operating profit at $60\%,70\%$ and $80\%$ levels of capacity

utilization at current selling price and at proposed selling price.

The percentage increase in the present output which will be required to maintain the present

profit margin at the proposed selling price.