Management of a Company seeks your advice whether to go for sales in a nearby foreign country. They have furnished the following historical data: Units — 4,200, Wages - ₹ 12,600, Materials — ₹ 21,000, Fixed cost — ₹ 7,00

Before affording advice, we may compute the following: Domestic (4200 Units) Foreign (800 Units) Total (5000 Units) Sales (Units x Price) (A) 63,000 8,000 71,000 Material (₹5 per unit) ₹21,000 ₹4,000 ₹25,000 Wages (₹3 per unit) ₹12,600 ₹2,400 ₹15,000 Variables (₹0.50 per unit) ₹2,100 ₹400 ₹2,500 Freight (₹0.25 per unit for foreign market) — ₹200 ₹200 Marginal Cost (B) ₹35,700 ₹7,000 ₹42,700 Contribution (A - B) ₹27,300 ₹1,000 ₹28,300 Less Fixed Cost ₹7,000 — ₹7,000 Overall Profit ₹20,300 ₹1,000 ₹21,300 From the above calculation, it can be concluded that accessing the foreign market enhances the overall profit to the Management.