Concept:
Total Cost = Fixed Cost + Variable Cost
Total Cost = F + Q × v
Total Selling Price S.P = Q × s, where Q is production capacity, v is variable cost per unit and s is selling cost per unit
Total Profit = Selling Price - Total Cost
Calculation:
Given, F = Rs. 50000, Q = 1500 units, v = Rs. 200, s = Rs. 300
Actual Production capacity = 1500 × 0.8 = 1200 units
Total Cost = 50000 + 1200 × 200 = Rs. 2,90,000
Total selling price = 1200 × 300 = Rs. 3,60,000
Total profit per month = 3,60,000 - 2,90,000 = Rs. 70,000.
