CALCULATING ADDITIONAL PER UNIT COST ON THE GARMENTS

WASHING TROUSERS

MONTHLY PRODUCN. 1050

IN 5 MONTHS 5250

EXTRA REQUIRED 23200

EXTRA TIME REQD. 5302.857

TOTAL SEWING HOURS 15840

TOTAL HOURS FOR WT 21142.86

TOTAL FACTORY COSTS/TOTAL HOURS 2.818919

PER PRODUCT COST INCREASE 0.644324

OFFICE COST 4.242967

PER UNIT OFFICE COST 0.969821

FULL COST 13.55415

TOTAL FACTORY COST 59600 (REFER SHEET 2)

TOTAL OFFICE COST 94800 (REFER SHEET 2)

TOTAL SEW HRS FOR WT 6502.857

BIDDING PRICE FOR WASHABLE TROUSERS 16.66859

BIDDING PRICE FOR CARGO 16.47254

THEREFORE

BASE PRICE FOR WASHABLE TROUSERS 11.94

IDEAL/BIDDING PRICE FOR WASHABLE TROUSERS 16.66859

BASE PRICE FOR CARGO 12.22

IDEAL/BIDDING PRICE FOR CARGO 16.47254

2009 SALES 1350000

CARGO 2009 NET INCOME 310200

MONTHLY UNITS 2500 MARGIN 22.97778

HOURS/MNTH 571.4286

HOURS/YEAR 6857.143

TOTAL SEWING HOURS 15840

TOTAL HOURS 22697.14

FACTORY COST 59600

INC. IN UTILITIES 3744

TOTAL 63344

TOTAL FACTORY COST/TOTAL HOURS 2.790836

PER PRODUCT INCREASE 0.637905

EXTRA SALARY INCREASE 114800

TOTAL SALARY TO BE DIVIDED/HOURS 5.139455

PER PRODUCT EXTRA COST 1.174733

FULL COST 13.39473

IF THE COMPANY IS ABLE TO SELL THE GARMENTS AT THE BIDDING PRICE,

THE PROFIT IS MORE IN THE CASE OF VARGO THAN WASHABLE TROUSERS.

HENCE, THE COMPANY COULD GO FOR BIDDING CARGO ONLY

PROFIT FOR WASHABLE TROUSERS 88605.95

PROFIT FOR CARGO 92334.22