K1 and K2 are two similar plants under the same management who want them to be merged for better operation. The details of K1 and K2 are as follows:
|
|
K1 |
K2 |
|
Capacity Utilization |
90% |
60% |
|
Sales |
Rs. 6,30,000 |
Rs. 3,60,000 |
|
Variable Cost |
Rs. 3,60,000 |
Rs. 2,40,000 |
|
Fixed Cost |
Rs. 1,20,000 |
Rs. 80,000 |
Find out:
- BEPS of the merged plant and capacity utilization for achieving BEPS.
- Profitability of the merged plant at 80% capacity.
- Sales of the merged plant to earn a profit of Rs. 1,00,000.