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

Explain four different types of organizational structure, QUESTION 1 An...

QUESTION 1 An organization structure is the organization framework by which job tasks are divided grouped and coordinated (a) Explain the four different types of organizatio

Short-turm financing, What are the three approach to the short-term financi...

What are the three approach to the short-term financing problem and provide relevant examples for each ?

Composition of solid waste, The composition of solid waste from a residenti...

The composition of solid waste from a residential community is as follows: Component Percent by weight Combustibles ---

Inadequacies of the traditional public administration, Question 1: The ...

Question 1: The Public Sector is undergoing a major transformation. What according to you, are the imperatives that are driving the change process ? Question 2: What

Explain the hawthorne studies, Question: There is no one specific metho...

Question: There is no one specific method of categorizing organization theories. However, it is generally accepted that: (a) The Type 1 theorists, also known as the classica

Describe hub management process, Question 1 Explain the different methods ...

Question 1 Explain the different methods of internal and external communication Question 2 Explain the three stages of a pickup process Question 3 Explain the diff

Environment and natural resource management, discuss merits and demerits of...

discuss merits and demerits of common property regimes and open access property regimes

Charging desk -circulation area in library building, Charging Desk -Circula...

Charging Desk -Circulation Area in library building This is the key functional area of the library and a great deal of  thought should be given to its location, size and shape

Requirements of sustainability, Question 1: What are the important ste...

Question 1: What are the important steps a hotel could take in order to meet the environmental concerns of the country and the requirements of sustainability? Question 2:

Advanced Linear programming questions, where can i get Advanced Linear Prog...

where can i get Advanced Linear Programming questions from ??

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