A company is currently running at 50% capacity and produces 5,000 units at a cost of Rs. 90 per unit as per the given following details:
|
|
Rs |
|
Material |
50 |
|
Labour |
15 |
|
Factory Overheads [Rs. 6 fixed] |
15 |
|
Administrative Overheads [Rs. 5 variable] |
10 |
|
Current Selling Price |
100 |
At 60% Working Capacity, the Material Cost per unit increases by 2% and the Selling Price per unit falls by 2%.
At 80% Working Capacity, the Material Cost per unit increases by 5% and the Selling Price per unit falls by 5%.
Estimate the Profits of the factory at 50%, 60% and 80% Working Capacity and offer your comments.