Kaplan Ltd. is one of the premier industries that manufactures fan belts for automobiles. If a belt is not sold in the year of production, it becomes defective and has to be scrapped. The following estimates reveal all the costs of Kaplan Ltd.
If $P(n) = Production$ cost of the nth unit, then $$P(n) = Rs. 20; 0 < n < 40001$$ $$P(n)= Rs. 25; n > 40000$$
Total salary cost for Kaplan Ltd. $Rs. 1.5$ lakh per annum
Maintenance cost $Rs. 30,000$ per annum
Fuel supply and electricity cost $Rs. 20,000$ per annum
What is the total cost for Kaplan Ltd., when it sold $55,000 units$ of fan belts in the market in a particular year?
- Fixed Payment = $1,50,000 + 30,000 + 20,000 = 2,00,000$
- Manufacturing Cost = $(40,000 * 20)+(15,000 * 25) = Rs. 11.75 lakhs$ $$Total cost= Rs. 13.75 lakhs$$
How should I go from here? I am guessing I need to know the profit generated! But how? How will I end up getting the total cost for $55k$ units?