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

Levels of measurement, LEVELS OF MEASUREMENT: Measurement is the proce...

LEVELS OF MEASUREMENT: Measurement is the process  of assigning numbers  to  the variables. Ways  to assign these numbers include counting, ranking and comparing objects or ev

Incentives, I ncentives These are rewards given when vendor/contractor...

I ncentives These are rewards given when vendor/contractor exceeds your expectation. Incentives should increase contractor?s profit. Incentives can be categorised as:

Practice, P ractice Practice can be developed when the community keeps...

P ractice Practice can be developed when the community keeps continuous interactions with the domain. The members of the community of practices are the practitioners. They wil

Main features of the new public management, Question 1: Elaborate on th...

Question 1: Elaborate on the weaknesses of the Traditional Model of Public Administration. Question 2: Define the term "Administrative Reform". Why is it so critical i

Explain the role of union, The purpose of this assignment is to develop lea...

The purpose of this assignment is to develop learners' ability to relate the current relevant principles, concepts and theories of compensation management with their professional p

Explain how cryptography works, a) Differentiate between encryption and dec...

a) Differentiate between encryption and decryption. b) Explain how cryptography works. c) List down three examples of symmetric key algorithms and two examples of asymmetric

Information and library network, INFLIBNET (Information and Library Network...

INFLIBNET (Information and Library Network)   The University Grants Commission (UGC) in its attempt to establish networking has taken the initiative and decided to develop a ne

Information demand , Information Demand  Information services are need...

Information Demand  Information services are needed to provide information not only on demand but also in anticipation of its use. Often it will be necessary to repackage the

Write a long note on the fork method, Question 1 What should an interviewe...

Question 1 What should an interviewee remember before being interviewed? How can a potential interviewee prepare for an interview? Question 2 Discuss the different types 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