Question 3: M/S Osmosis (Pvt.) Ltd. is a small family owned company and operates a water distribution plant in a small town of Karachi. The main target of the company is to provide healthy water to all residents in the town at a lower cost as compared with other private plants operators in the town. The company is strictly following the Corporate Social Responsibility (CSR) Policy and sets its mission statement as "to provide, efficient, reliable and affordable water services, for all the citizens in the town". Company planned to charge only affordable price from the consumers i.e. Cost Plus 25% for meeting its head office people salaries and other allied expenditures. Company's water purification process involves water suction from the sea and putting the same into desalination process and mixing some softened water and minerals to make it drinkable, its policy of the company that, costs of softened water and minerals is treated under overhead costs. The details for per day costs of processing water are as follows: Raw Water Put into Process 20,000 Litters at Rs. 2-50 per litter Direct labour Rs. 15,000 Production overheads e.g. Cost of Softened Water and Minerals etc. 150% of direct labour It is normal that 12% of input in process gets lesser minerals and can be sold @ Rs. 1.50 per liter. The output is 18,500 liters per day. There was no work-in-progress at the beginning or end of the period. What is the price per liter of the output to be charged by the company? (10 Marks)