Question

East India company works at present at 50% capacity and produced
10,000 units. The company decided to increase its capacity to 60% and reduces
the selling price by 2% but the material cost increased by 2% and also decided to
increase its capacity to 80% and reduces the selling price by 5% but the materials
cost increased by 5%.
At present 50% capacity level, the total cost Rs.180 and the selling price
Rs.200 per unit. Out of total cost the fixed overheads is Rs.22. The total cost
divided as follows: Materials - 100/-, Labour - 30/-
Factory overheads 30/- (40% Fixed) office and selling overheads 201-
(50% Fixed).
. Find profit at 60% and 80% capacity level as per marginal cost technique.​

Answer 1

the profit percentage is 25