Question

A manufacturer has the following data regarding a product:
Fixed cost per month = Rs. 50000
Variable cost per unit = Rs. 200
Selling price per unit = Rs. 300
Production capacity = 1500 units per month
If the production is carried out at 80% of the rated capacity, then the monthly profit (in Rs.) is .

• A. 70000

Answer 1

The correct option is A 70000
$\text{Production = 0.8 × 1500 = 1200}$

$\text{Profit = S - V - F}$

$=1200\times 300-1200\times 200-50000$

$=Rs.70,000$