Question 2: A garment factory is facing recession. Its sunk cost are Rs. 50 lakhs per annum while the out of pocket costs are Rs. 80 per unit. The factory has a capacity to produce 24,000 units per year. Due to recession the maximum expected sales for six months are 6000 units at a selling price of Rs. 100 per unit. The recession is expected to last 6 months. Should the factory be shut down for this period? Write your comments

Question 2: A garment factory is facing recession. Its sunk cost are Rs. 50 lakhs per annum while the out of pocket costs are Rs. 80 per unit. The factory has a capacity to produce 24,000 units per year. Due to recession the maximum expected sales for six months are 6000 units at a selling price of Rs. 100 per unit. The recession is expected to last 6 months. Should the factory be shut down for this period? Write your comments

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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