a factory can produce 60 000 units per annum at its optimum capacity the estimated u 619595

A factory can produce 60,000 units per annum at its optimum capacity. The estimated unit cost of production is as follows:

Direct material	3
Direct labour	2
Indirect expense	1,50,000 p.a.
Fixed	5/unit

Variable–Semi–variable: Rs. 50,000 p.a. up to 50% capacity and an extra of Rs. 10,000 for every 25% increase in capacity or part thereof.

The factory produces only against orders (and not for stock). The production programme of the factory is as indicated below. The management desires to ensure a profit of Rs. 1,00,000 for the year. Work out the average selling price at which each unit should be quoted:

First 3 months of the year: 50% of the capacity

Remaining 9 months: 80% of the capacity

Ignore selling and administration overheads.