In a purely competitive market, 10,000 pocket transistors can be manufactured and sold and certain profit is generated. It is estimated that 2,000 pocket transistors need to be manufactured and sold in a monopoly market

CS Executive · Cost and Management Accounting · PYQS · December 2016
In a purely competitive market, 10,000 pocket transistors can be manufactured and sold and certain profit is generated. It is estimated that 2,000 pocket transistors need to be manufactured and sold in a monopoly market to earn the same profit. Profit under both the conditions is targeted at ₹2,00,000. The variable cost per transistor is ₹100 and total fixed costs are ₹37,000. Unit selling price per transistor under monopoly condition will be —
(A) ₹218.50
(B) ₹234.50
(C) ₹267.25
(D) ₹274.35

Answer & Explanation:

Correct Answer: Option (A)

Official answer key: (A).

Topics: Management Accounting

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