A company had a capacity of 1000 units of production, but could only produce 800 items in the year 2010. The capacity to produce was increased by 20% in 2012 and again by 25% in 2014. The actual production went up by 100 units only each year for next four years. However, sales (which were 700 in 2010) were not consistent. Sales went up by 40% in 2011 but went down by 150 in 2012. However, after 2012 sales went 100 units up every year. Any surplus production over sales was added to stocks at the end of the calendar year. However, the excess of sales over production in any year, if... Show more A company had a capacity of 1000 units of production, but could only produce 800 items in the year 2010. The capacity to produce was increased by 20% in 2012 and again by 25% in 2014. The actual production went up by 100 units only each year for next four years. However, sales (which were 700 in 2010) were not consistent. Sales went up by 40% in 2011 but went down by 150 in 2012. However, after 2012 sales went 100 units up every year. Any surplus production over sales was added to stocks at the end of the calendar year. However, the excess of sales over production in any year, if any, was to be drawn from the stocks. Stock in 2010 beginning is taken as Zero. Sales price was Rs.10 per unit in 2010 but was reduced by Re1 per unit next year. Thereafter no change in sales price till 2014. (Capacity utilization = Production/Capacity) Show less
A company had a capacity of 1000 units of production, but could only produce 800 items in the year 2010. The capacity to produce was increased by 20% in 2012 and again by 25% in 2014. The actual production went up by 100 units only each year for next four years. However, sales (which were 700 in 2010) were not consistent. Sales went up by 40% in 2011 but went down by 150 in 2012. However, after 2012 sales went 100 units up every year. Any surplus production over sales was added to stocks at the end of the calendar year. However, the excess of sales over production in any year, if any, was to be drawn from the stocks. Stock in 2010 beginning is taken as Zero. Sales price was Rs.10 per unit in 2010 but was reduced by Re1 per unit next year. Thereafter no change in sales price till 2014.
(Capacity utilization = Production/Capacity)
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