Present level of production, Other Management

Assignment Help:

General Components Ltd produces a component ‘X', the selling price of which is Rs 50. The unit cost structure based on the present level of production/sales of 100 000 units is:

Direct materials           Rs 20
Direct labour               Rs 5
Variable Overhead      Rs 2
Fixed overhead           Rs 8

The present level of production represents 100% of capacity working a single shift. The marketing manager estimates that at the present price the quantity sold during the next year could be increased by 50%.

A second shift has been proposed. This would increase production capacity to 180 000 components per annum, fixed costs increasing by Rs 550,000 per annum. A shift work premium of 20% would be payable to the direct workers engaged on the additional shift. However, if production was at least 150 000 components per annum, the whole of the direct materials used would qualify for a discount of 10%.

Required:

Calculate whether it would be profitable for General Components Ltd to add the second shift.


Related Discussions:- Present level of production

Specimen of a binding register - library management, Specimen of a Binding ...

Specimen of a Binding Register: Libraries keep a regular binding register or cards which carry all particulars of books sent for binding. This is required not only for maintai

Consulting and indents passing - library administration, Consulting: C...

Consulting: Consulting work can be done at prescribed  intervals or as and when needed for placing an  urgent order. For this purpose, subject lists are typed out from the car

Functions of library classification , Functions of library classification :...

Functions of library classification : Functions of library classification can be summarised as follows: i) Library classification helps to arrange documents in a systemati

Beta of a share, Beta of a share Financial analysts often talk of the ...

Beta of a share Financial analysts often talk of the beta (b) of a share. We will describe what the beta signifies and the method commonly used to estimate it in this section.

Meaning and characteristics - types of approaches, Meaning and Characterist...

Meaning and Characteristics: Meaning: The survey method primarily focuses on  the present. In nursing survey approach  is  used  to a great extent.  It  is  a non-experiment

Product development cycle, Product development cycle   All products unde...

Product development cycle   All products under development typically follow the cycle of market place-to-market place. The development starts with identification of a product in

What are the health and safety effects of shift work, QUESTION 1 (a) Wh...

QUESTION 1 (a) What is ergonomics? How would you identify ergonomic problems and what kind of workplace problems can ergonomics solve? (b) How would you improve the design o

Explain e-compensation tools, In most modern organizations, the employment ...

In most modern organizations, the employment relationship has shifted from being life-long with career management provided by the organization into being more short-term with emplo

The computer misuses and cybercrimes that are punishable, QUESTION 1 Wh...

QUESTION 1 What are the principles that one should take into consideration when dealing with data protection? QUESTION 2 What are the institutions set up for the protec

Sewing and collation - library bindings, Sewing and Collation - library bin...

Sewing and Collation - library bindings: Reinforced new books which conform to A.L.A. standards, shall be designated as follows: Resewed and reinforced in class `A' cover o

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd