Answer the following question based on the information given below:
The following table shows the break-up actual costs incurred by a company in last five years [year $2002$ to year $2006]$ to produce a particular product.
The production capacity of the company is $2000$ units. The selling price for the year $2006$ was Rs. $125$ per unit. Some costs change almost in direct proportion to the change in volume of production, while the other do not follow any obvious pattern of change with respect to the volume of production and hence are considered fixed. Using the information provided for the year $2006$ as the basis for projecting the figures for the year $2007$, answer the following questions
| |
Year 2002
|
Year 2003
|
Year 2004
|
Year 2005
|
Year 2006
|
|
Volume of production
|
1000
|
900
|
1100
|
1200
|
1200
|
|
Cost(Rs)
|
|
|
|
|
|
|
Material
|
50,000
|
45,100
|
55, 200
|
59, 900
|
60, 000
|
|
Labour
|
20,000
|
18,000
|
22, 100
|
24,150
|
24,000
|
|
Consumables
|
2,000
|
2,200
|
1,800
|
1,600
|
1,400
|
|
Rent of building
|
1000
|
1000
|
1100
|
1100
|
1200
|
|
Repair and maintenance expenses
|
800
|
820
|
780
|
790
|
800
|
|
Operating cost of machines
|
30,000
|
27,000
|
33,500
|
36,020
|
36,000
|
|
Rates and taxes
|
400
|
400
|
400
|
400
|
400
|
|
Selling and marketing expenses
|
5,750
|
5,800
|
5, 800
|
5,750
|
5,800
|
If the company reduces the price by $5\%,$ it can produce and sell as many units as it desires. How many units the company should produce to maximize its profit?
- $1400$
- $1600$
- $1800$
- $1900$
- $2000$