Question

Q7 a.A manufacturer produces a car component. The cost sheet of the component is as
(5)
follows:
Direct Material 4.00
Direct Labour 2.00
Variable Overheads 1.50
Fixed Overheads 2.50
A foreign manufacturer who uses this car component offers to purchase 20.000 units at Rs. 13
per component against the usual price of Rs. 15 per unit. If this offer is accepted the fixed
expenses will go up by Rs. 40,000 annually
Pg6
Would you accept this offer? Are there any other considerations, which may affect your
decision?
Q7 b.Calculate the effect on profit of a proposed change in 'Sales Mix" from the following data and
also suggest that whether company should change the sales mix or continue with the existing: (5)
NO
N
PI
Total Sales (in Rs)
Existing Sales min(Rs.) 80.000
100.000
20.000
Variable Cost un Rs) 48.000
8.000
5200
Fixed Cost in Rs
US $100
Proposud Sales Mix Rs.100.000​

Answer 1

Answer:

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Explanation:

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