Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Managerial Accounting Expert

Problem:

General Components Ltd generates a component ‘X’, the selling price of which is Rs 50. The unit cost structure based on the present level of production or sales of 100 000 units are:

Direct materials                     Rs 20
Direct labour                         Rs   5 
Variable Overhead                Rs   2
Fixed overhead                     Rs   8

The present level of production represents 100% of capacity working a single shift. The marketing manager estimates that at the present price the quantity sold throughout the next year could be increased by 50%.  A second shift has been proposed.  This would raise production capacity to 180 000 components per annum, fixed costs rising by Rs 550,000 per annum. A shift work premium of 20% would be payable to the direct workers engaged on the additional shift. But, if production was at least 150 000 components per annum, the entire of the direct materials employed would qualify for a discount of 10%.

Required:

Evaluate whether it would be profitable for General Components Ltd to add the second shift.

Managerial Accounting, Accounting

  • Category:- Managerial Accounting
  • Reference No.:- M97258

Have any Question? 


Related Questions in Managerial Accounting

Tri-county cable services inc is organized with three

Tri-County Cable Services, Inc., is organized with three segments: Metro, Suburban, and Outlying. Data for these segments for the year just ended follow. Metro Suburban Outlying Service revenue $ 1,050,000 $ 850,000 $ 45 ...

Suppose a firm has had the following historic sales

Suppose a firm has had the following historic sales figures: 2009: 1,450,000 2010: $ 1,710,000 2011 : $ 1,600,000 2012: $ 2,000,000 2013: $ 1,850,000 What would be the forecast for next year's sales using regression to e ...

Exercise- estimating cost behaviorhigh-low methodjonathan

Exercise- Estimating Cost Behavior;High-Low Method Jonathan Macintosh is a highly successful Pennsylvania orchardman who has formed his own company to produce and package applesauce. Apples can be stored for several mont ...

Assignmentyou are a manager of table top limited a

Assignment You are a manager of Table Top Limited, a manufacturer of small tables . You have been instructed to prepare a budget for the next year's operations with the following forecast: The sales volume is forecast to ...

Accounting1 from the e-activity assess the advantages and

Accounting 1. From the e-Activity, assess the advantages and disadvantages of the continued use of the traditional relational database and then decide if businesses should be moving toward relational databases in the clo ...

Individual research paper instructions1write a 8-10-page

INDIVIDUAL RESEARCH PAPER INSTRUCTIONS 1. Write a 8-10-page, double-spaced research paper that adheres to APA format. 2. It must include references from at least 6 different sources, a title page, and a reference page. 3 ...

Managerial accounting assignment questionwidget airlines is

Managerial Accounting Assignment Question Widget Airlines is a leading business in travelling industry and has experienced turbulent times during the past 10 years due to stiff competition and as a result of global slowd ...

Accounting assessment1 ohio corporation sells its product

Accounting Assessment 1. Ohio Corporation sells its product for $16 per unit and incurs variable costs of $10 per unit and total fixed costs of $12,000. What is Ohio Corporation's break-even point for sales of this produ ...

You have almost convinced yourself that there might be a

You have almost convinced yourself that there might be a successful business in the idea of bringing senior citizens together in arcades to play various games on Wii (or something similar). You think about how people lik ...

The facts and figures relating to irrigation corporation

The facts and figures relating to Irrigation Corporation are as follows. Irrigation Corporation produces plastic garden sprinklers. The company is preparing its budget for 2016. The first step is to plan for the first qu ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

WalMart Identification of theory and critical discussion

Drawing on the prescribed text and/or relevant academic literature, produce a paper which discusses the nature of group

Section onea in an atwood machine suppose two objects of

SECTION ONE (a) In an Atwood Machine, suppose two objects of unequal mass are hung vertically over a frictionless

Part 1you work in hr for a company that operates a factory

Part 1: You work in HR for a company that operates a factory manufacturing fiberglass. There are several hundred empl

Details on advanced accounting paperthis paper is intended

DETAILS ON ADVANCED ACCOUNTING PAPER This paper is intended for students to apply the theoretical knowledge around ac

Create a provider database and related reports and queries

Create a provider database and related reports and queries to capture contact information for potential PC component pro