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

Issues in public relation, Question In 2000, various instances were rep...

Question In 2000, various instances were reported in which Ford owners with Firestone tyres were experiencing tyre blowouts ultimately causing around 150 deaths and over 500 s

Instructional leadership, 1. What instructional technology and techniques i...

1. What instructional technology and techniques increase student achievement? 2. Does single-gender education increase student achievement? 3. Does class size impact student achiev

Back charging, B ack charging: Back charging the contractor arises ...

B ack charging: Back charging the contractor arises when a certain scope of work included in the contract is either not carried out or carried out defectively. When such an

What is the maximum usable frequency for the path, Question: (a) A HF ...

Question: (a) A HF digital radio data link operates over a distance of 1000 km. Depending on transmission frequency, reflection can occur from the F2 region of the ionospher

Audience analysis, Audience Analysis To enhance communication with you...

Audience Analysis To enhance communication with your audience, you must have to analyze it carefully to formulate a message in a way they will understand and search meaningful

Define quality management system, Question 1 Define Quality Management Sys...

Question 1 Define Quality Management System. Describe the scope of Quality management system Question 2 Explain Design review and Design verification Question 3 Explain

Steps in production process , Steps in production process  A project wh...

Steps in production process  A project whether it is the development of Fast Moving Consumer Goods (FMCG) product, a Parma product or any other product, generally follows the s

Process of searching literature, The fair trade movement can be understood ...

The fair trade movement can be understood as an NGO effort to establish a market outside of mainstream commodity monopolies while simultaneously inserting non-market concerns for j

Organizational behaviour, case study solution for competent motors limited ...

case study solution for competent motors limited case

Standards and specifications -physical planning of library , STANDARDS AND ...

STANDARDS AND SPECIFICATIONS -PHYSICAL PLANNING OF LIBRARY-LIBRARY MANAGEMENT  In the field of library work, most of the standards or specifications that have evolved over the

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