A Company has two Plants at Locations I and II, operating at 100% and 75% of their capacities respectively. The company is considering a proposal to merge the two plants at one location to optimize available capacity. The following details are available in respect of the two plants, regarding their present performance/operation.
|
Particulars |
Location I |
Location II |
|
Sales [Rs.in lakhs] |
200 |
75 |
|
Variable Costs [Rs. in lakhs] |
140 |
54 |
|
Fixed Cost [Rs. in lakhs] |
30 |
14 |
For decision-making purposes, you are required to work out the following information,
I. The capacity at which the merged plan will break even.
II. The profit of the merged plant working at 80% capacity
III. Sales required if the merged plant is required to earn an overall profit of Rs.22, 00,000