can anyone plz explain why sir here ignored 50000 of additional selling expense in answer and taken 50000 of additional administrative fixed overhead in both options ?? Instead can’t we take 50K additional fixed overhead in 1 option and the other 50k additional selling expense in other option ? As then also our answer wont be affected
Share
Share the solution we did in class
Plz check sir
It is the answer we did in class for Q4 . Here we took fixed cost of rs 50000 both times and not additional selling expense of 50000 for sales of additional 5000 units and we wrote in advice that we should incur 50000 additional selling exp as our profit is 60000 which is more than 50000?so can’t we consider 50k selling exp above in solution as it is our incremental exp.?