Solution-Should the offer be accepted for jamshed crockery

Should the offer be accepted for jamshed crockery ltd

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Reference no: EM132796990

Problem 1: Jamshed crockery ltd. manufactures cookware. Expected annual volume of 1,00,000 sets per year is well below its full capacity of 1,50,000. Normal selling price is Rs. 40 per set. Manufacturing cost is Rs. 30 per set (Rs 20 variable and Rs. 10 fixed). Total fixed manufacturing cost is Rs. 10,00,000. Selling and administrative expenses are expected to be Rs. 5,00,000 (Rs. 3,00,000 fixed and Rs. 2,00,000 variable). A departmental store offers to buy 25,000 sets of Rs. 27 per set. No extra selling and administrative costs would be caused by the order. Further, the acceptance of this order will not affect regular sales. Should the offer be accepted?

Reference no: EM132796990

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Should the offer be accepted for jamshed crockery ltd

Reference no: EM132796990

Reference no: EM132796990

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