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(solution) Health Management Associates Inc.


Health Management Associates Inc.The following figures are obtained from the budget of Health Management Associates Inc. which is at present working at 90% capacity and producing 13,000 units per annum.90%$100%$Sales15,00,00016,00,000Fixed Expenses3,00,5003,00,600Semi- Fixed Expenses97,5001,00,500Variable Overhead Expenses1,45,0001,49,500Units made13,50015,000Labour and material costs per unit are constant under present conditions. Profit margin is 10 per cent.a) You are required to determine the differential cost of producing 1,500 units by increasing capacity to 100 per cent.b) What would you recommend for an export price for these 1,500 units taking into account that overseas prices are much lower than indigenous prices?

 


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