A company manufactures electric motors at a price of Rs. 6,900 each, which is made up as follows:
|
|
|
|
Direct Material |
3,200 |
|
Direct Labour |
400 |
|
Variable Overheads |
1,000 |
|
Fixed Overheads |
200 |
|
Depreciation |
200 |
|
Variable Selling Overheads |
100 |
|
Royalty |
200 |
|
Profit |
1,000 |
|
6,300 |
|
|
Central Excise Duty |
600 |
|
6,900 |
- A foreign buyer has offered to buy 200 such motors at Rs. 5,000 each. As a Cost Accountant of the company, would you advise acceptance of the offer?
- What should the company quote for a motor to be purchased by a company under the same management if it should be at cost?