what would you recommend for an export price of these 1 000 units taking into accoun 609594

A company is at present working at 90% of its capacity and producing 8,000 units per annum. It operates a flexible-budgetary control system. The following figures are obtained from its budget:

90% Capacity Rs.

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100% Capacity Rs.

1. Sales

12,00,000

15,00,000

2. Fixed expenses

2,50,000

2,50,000

3. Semi-fixed expenses

75,000

1,00,000

4. Variable expenses

1,25,000

1,50,000

5. Units made

9,000

10,000

Labour and the material cost per unit are constant under present conditions. profit margin is 10%.

  1. You are required to determine the differential cost of producing 1,000 units by increasing the capacity to 100%.
  2. What would you recommend for an export price of these 1,000 units taking into account that the overseas prices are much lower than the indigenous prices.
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