Decision Making - Accept and order or not.

Q.  ABC Ltd manufactures a single product and sales for Rs 30 per unit. There is increased demand of the product. The Direct Material is Rs 8, Direct labour (2 hours) is Rs 4 and Variable overheads is Rs 4. The labour force is working at full capacity and no extra time is available. Mr. X has approached ABC Ltd with a request for manufacture special order at Rs 8,000. Also, 600 hours labour will be required and cost of the order will be Rs 3000 for Direct Material. Variable overhead per hour will be Rs 2. Should the order be accepted? Why?
- Published on 15 Sep 15

a. Yes, Net Profit Rs 1,600
b. No, Net loss Rs 1,600
c. No, Net loss Rs 2,000
d. Yes Net Profit Rs 2,000

ANSWER: No, Net loss Rs 1,600

Related Content

 

    Discussion

  • Ahmed   -Posted on 05 Jan 18
    here are the questions but I require the answers for the questions below.

➨ Post your comment / Share knowledge


Enter the code shown above:

(Note: If you cannot read the numbers in the above image, reload the page to generate a new one.)
▲