Solution-Calculate the number of electrical irons

Calculate the number of electrical irons

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Reference no: EM132826535

Question - Suman Ltd manufactured and sold 1000 electric irons last year at a price of Rs 800 each. The cost structure of electric iron is as follows:

Particulars Per unit (Rs)

Materials 200

Labour 100

Variable overheads 50

Total marginal cost 350

Factory overheads (fixed) 200

Total Cost 550

Profit 250

Sales 800

Due to heavy competition, price has to be reduced to Rs 750 as suggested by the marketing manager. Is it a good idea?

Assuming no change in costs, calculate the number of electrical irons that would have to be sold at the new price to ensure the same amount of profit as that of the last year.

Reference no: EM132826535

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Calculate the number of electrical irons

Reference no: EM132826535

Reference no: EM132826535

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