A factory engaged in manufacturing plastic buckets is working @ 40% capacity and produces 10,000 buckets per month.
The present cost break-up for one bucket is as follows:
|
|
Rs |
|
Material |
10 |
|
Labour |
3 |
|
Overhead [60% fixed] |
5 |
The Selling Price is Rs. 20 per bucket. If it is decided to work the factory at 50% capacity, the Selling Price falls by 3%. At 90% capacity, the Selling Price falls by 5%, accompanied by a similar fall in the price of material.
You are required to prepare a statement showing the profit at 50% and 90% capacities and also to calculate the break-even points at each of these production levels.