Question
Gamma Textiles Ltd. manufactures a single product with
the following cost structure: • Selling Price per unit: ₹500 • Variable Cost per unit: ₹300 • Fixed Costs per month: ₹8 lakh • Normal monthly sales: 5,000 units Due to a market recession, demand is expected to fall to 1,500 units/month. The company has the option to shut down temporarily, in which case fixed costs would reduce to ₹2.5 lakh/month (as unavoidable fixed costs). Based on marginal costing principles, what should the company do?Solution
Comparison of Two Scenarios: ✅ If the firm continues operating: • Contribution = ₹3,00,000 • Fixed cost = ₹8,00,000 • Net loss = ₹(5,00,000) ✅ If the firm shuts down: • Contribution = ₹0 • Fixed cost (unavoidable) = ₹2,50,000 • Net loss = ₹(2,50,000) Since loss is lower in shut-down mode (₹2.5L < ₹5L), the firm should still shut down temporarily.
What kind of infrastructure gives the highest impetus for a successful global financial center?
Gujarat International Finance Tec-City (GIFT City) is located on the bank of which river?
The subprime lending meltdown in 2008 made the banks and regulators realize the importance of liquidity risk management in banks. Which of the following...
As per the IRDA Act 1999, when IRDA was established, it replaced _______under Insurance Act 1938.
Which of the following SEBI regulations are concerned with the issue of securities?
When was the idea of the Social Security Exchange floated in India?
Consider the following Statements about the GFCs and choose the option with Correct Statements.
I- The city ranked as the No. 2 GFC in the world ...
As per Global Financial Centres Index (GFCI), how many associate centres are awaiting potential inclusion in the main index?
Which of the following is not a feature of the International Financial Services Centres Authority established under the IFSCA Act?
Which age group is eligible to buy the ABSLI Anmol Suraksha Kawach plan?
