nisha chandra own a business of supplying and manufacturing and fixtures. her company has received an order of supplying furniture of rs 2,00,000 for an office. she has shown it as a part of her profit. is she correct doing so?
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Yes the approach is right as every order that the company receives should yield some part as profit. Although for every order the profit margin can vary depending on the nature of customer, size of order etc but for a profitable business, it is the duty of owner to make sure that his manufacturing and all other expenses should be less than the volume of that order in total and from that order, some part will be his profit
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