C per unit e Everest Snow Company manufactures and sells direct to consumers 10,000 jars of 'Everest The ner month at 1.25 per jar. The company's normal production capacity is 20,000 jars of 22. snow per month. An analysis of cost for 10,000 jars shows : Direct Material 1,000 Direct labour 2,475 Power 140 or t Miscellaneous supplies 430 Jars 600 ixe Fixed expenses of manufacturing, selling and administration 7,955 Total 12,600 The company has received offer for the export under a different brand name of 1,20,000 jars of snow at 10,000 jars per month at 75 paise a jar. Write a report on the advisability or otherwise of accepting the offer. [Ans. The offer should be accepted. Additional contribution, 2,855 Net Profit from 20,000 jars (including exports), 2,755] [Hint : Loss on the existing 10,000 jars, 100) M/s Arvind & Co. are producing and selling fancy footwears only in Indian market. The cost break-up is as follows: 23. Per pair 30 00 Raw materials 15.00 Labour 3.00 Packing, labelling 5.00 Factory expenses
C per unit e Everest Snow Company manufactures and sells direct to consumers 10,000 jars of 'Everest The ner month at 1.25 per jar. The company's normal production capacity is 20,000 jars of 22. snow per month. An analysis of cost for 10,000 jars shows : Direct Material 1,000 Direct labour 2,475 Power 140 or t Miscellaneous supplies 430 Jars 600 ixe Fixed expenses of manufacturing, selling and administration 7,955 Total 12,600 The company has received offer for the export under a different brand name of 1,20,000 jars of snow at 10,000 jars per month at 75 paise a jar. Write a report on the advisability or otherwise of accepting the offer. [Ans. The offer should be accepted. Additional contribution, 2,855 Net Profit from 20,000 jars (including exports), 2,755] [Hint : Loss on the existing 10,000 jars, 100) M/s Arvind & Co. are producing and selling fancy footwears only in Indian market. The cost break-up is as follows: 23. Per pair 30 00 Raw materials 15.00 Labour 3.00 Packing, labelling 5.00 Factory expenses
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
![MARGINAL COSTING- Il: APPLICATION OF MARGINAL COSTING TECHNIQUES
(b) the selling price is reduced by 20 % ?
cycles will have to be made to get the same amount of profits, if :
Snow' per month at 1.25 per jar. The company's normal production capacity is 20,000 jars of
to keep the total profits intact. What level of production will have to be reached, ie., how many
The company expects that due to competition they will have to reduce selling price, but they want
ion is possibl
of buying 20
(a) the selling price is reduced by 10 %
e offer should
143
CHNIO
ed as it is
only when
ion is possibe
[Ans. (a) 1,25,000 cycles: (b)l.66,667 cycles)
F+ DesiredP
() the selling price is reduced by 20 % ?
%3D
Hint : Cycles to be sold
C per unit
Saow' per month at ? 1.25 per jar. The company's normal production capacity is 20,000 jars of
enow per month. An analysis of cost for 10,000 jars shows:
Everest Snow Company manufactures and sells direct to consumers 10,000 jars of Everest
22.
1,000
2,475
Direct Material
140
Direct labour
430
Power
600
er for te
Miscellaneous supplies
7,955
Jars
pting th
he fixe
duction
ould te
12,600
Fixed expenses of manufacturing, selling and administration
Total
The company has received offer for the export under a different brand name of 1,20,000 jars of
[Ans. The offer should be accepted. Additional contribution, 2,855 Net
Profit from 20,000 jars (including exports), 2,755]
snow at 10,000 jars per month at 75 paise a jar.
epted
Write a report on the advisability or otherwise of accepting the offer.
1 cos
COS
M/s Arvind & Co. are producing and selling fancy footwears only in Indian market. The cost
Per pair
[Hint : Loss on the existing 10,000 jars, 100)
ce by
aite)
23.
break-up is as follows:
30 00
Raw materials
15.00
3-00
Labour
5.00
Packing, labelling
2:00
Factory expenses
A dminiatrotive Oxnenses
ud](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F4111f84b-a4b9-4bf8-a75e-22efd222fb41%2Fec7e3aa2-c859-47db-b478-e1ca3aa14a29%2Fdxk94xh_processed.jpeg&w=3840&q=75)
Transcribed Image Text:MARGINAL COSTING- Il: APPLICATION OF MARGINAL COSTING TECHNIQUES
(b) the selling price is reduced by 20 % ?
cycles will have to be made to get the same amount of profits, if :
Snow' per month at 1.25 per jar. The company's normal production capacity is 20,000 jars of
to keep the total profits intact. What level of production will have to be reached, ie., how many
The company expects that due to competition they will have to reduce selling price, but they want
ion is possibl
of buying 20
(a) the selling price is reduced by 10 %
e offer should
143
CHNIO
ed as it is
only when
ion is possibe
[Ans. (a) 1,25,000 cycles: (b)l.66,667 cycles)
F+ DesiredP
() the selling price is reduced by 20 % ?
%3D
Hint : Cycles to be sold
C per unit
Saow' per month at ? 1.25 per jar. The company's normal production capacity is 20,000 jars of
enow per month. An analysis of cost for 10,000 jars shows:
Everest Snow Company manufactures and sells direct to consumers 10,000 jars of Everest
22.
1,000
2,475
Direct Material
140
Direct labour
430
Power
600
er for te
Miscellaneous supplies
7,955
Jars
pting th
he fixe
duction
ould te
12,600
Fixed expenses of manufacturing, selling and administration
Total
The company has received offer for the export under a different brand name of 1,20,000 jars of
[Ans. The offer should be accepted. Additional contribution, 2,855 Net
Profit from 20,000 jars (including exports), 2,755]
snow at 10,000 jars per month at 75 paise a jar.
epted
Write a report on the advisability or otherwise of accepting the offer.
1 cos
COS
M/s Arvind & Co. are producing and selling fancy footwears only in Indian market. The cost
Per pair
[Hint : Loss on the existing 10,000 jars, 100)
ce by
aite)
23.
break-up is as follows:
30 00
Raw materials
15.00
3-00
Labour
5.00
Packing, labelling
2:00
Factory expenses
A dminiatrotive Oxnenses
ud
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