BEPS of the merged plant and capacity utilization for achiev…
K1 and K2 are two similar plants under the same management who want them to be merged for better operation. The details of K1 and K2 are as follows:
K1
K2
Capacity Utilization
90%
60%
Sales
Rs. 6,30,000
Rs. 3,60,000
Variable Cost
Rs. 3,60,000
Rs. 2,40,000
Fixed Cost
Rs. 1,20,000
Rs. 80,000
Find out: BEPS of the merged plant and capacity utilization for achieving BEPS. Profitability of the merged plant at 80% capacity. Sales of the merged plant to earn a profit of Rs. 1,00,000.
