Vas & Co. Ltd is engaged in trading business and uses its own building for the purpose. The data obtained from the records of the company show the estimates as follows:
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Cost of goods sold per annum Don't use plagiarized sources. Get Your Custom Essay on
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70,000 |
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Other operating expenses per annum |
40,000 |
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Building ownership costs p.a. |
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(Rent and rates and maintenance and |
15,000 |
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insurance charges for building are not |
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included above |
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Sales per annum |
2,50,000 |
Another firm has offered to take the building on lease for Rs. 7,500 per month. In this case, Vas & Co. Ltd would have Rs. 7,500 per month. In this case, Vas & Co. Ltd would have to discontinue its operations and handover the building to the lessee.
You are required to take a decision using opportunity-costing approach.
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