Maurice Tutor

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Category > Accounting Posted 22 Jul 2017 My Price 6.00

level of operations

A manufacturer has planned his level of operations at 50% of his plant capacity of 30,000 units. His expenses are estimated as follows, at 50% of the plant capacity utilization:

   

Direct Materials

8,280

Direct Wages

11,160

Variable and other Manufacturing Expenses

3,960

Total Fixed Expenses Irrespective of Capacity Utilization

6,000

The expected selling price in the domestic market is Rs. 2 per unit. Recently, the manufacturer has received a trade enquiry from an overseas organization that is interested in purchasing 6,000 units at a price of Rs. 1.45 per unit.

As a professional Management Accountant what would be your suggestion regarding acceptance or rejection of the offer? Support your suggestion with suitable quantitative information.

Answers

Maurice Tutor
(5)
Status NEW Posted 22 Jul 2017 08:07 PM My Price 6.00

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