you are required to suggest whether a diversification is advisable 608764
M/s Bhagya & Co. is currently engaged in the manufacture and sale of a product EC. Its budget for the next year reveals the following:
|
Selling price/unit |
: Rs. 15 |
|
Variable cost/unit |
: Rs. 10 |
|
Fixed cost |
: Rs. 50,000 |
|
Demand |
: 25,000 units |
It wants to diversity into product OK in order to reduce its market risks, and following are the estimated data for the new product OK.
|
Selling price/unit |
: Rs. 18 |
|
Variable cost/unit |
: Rs. 12 |
|
Fixed cost |
: Rs. 30,000 |
|
Demand |
: 10,000 units. |
You are required to suggest whether a diversification is advisable?