Ahmed Chemicals LLC., has two factories with similar plant and machinery for manufacture of soda ash. The Board of Directors of the company has expressed the desire to merge them and to run them as one integrated unit. Following data are available in respect of these two factories: Factory Capacity in operation Y 70% 100% Turnover 120 lakhs 300 lakhs Variable cost 90 lakhs 220 lakhs Fixed costs 25 lakhs 40 lakhs Find out: (a) What should be the capacity of the merged factory to be operated for breakeven? (b) What is the profitability of working 75% of the integrated capacity? (c) What turnover will give an overall profit of OMR 60 lakhs?

Ahmed Chemicals LLC., has two factories with similar plant and machinery for manufacture of soda ash. The Board of Directors of the company has expressed the desire to merge them and to run them as one integrated unit. Following data are available in respect of these two factories: Factory Capacity in operation Y 70% 100% Turnover 120 lakhs 300 lakhs Variable cost 90 lakhs 220 lakhs Fixed costs 25 lakhs 40 lakhs Find out: (a) What should be the capacity of the merged factory to be operated for breakeven? (b) What is the profitability of working 75% of the integrated capacity? (c) What turnover will give an overall profit of OMR 60 lakhs?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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