sun1, here is the explanation:

**1) The Estimates:**

Currently the manager is making Rs10 profit per unit. Thats Situation 1, evident from the given data that the cost is

Total Cost = Fixed cost + Variable Cost

Total Cost = 30 + 60

Total Cost = Rs90 per unit,

Profit = 100 - 90 = Rs10 per unit

Since, the total productive capacity is not being utilized, there is a scope of increasing it.

Now, lets say the Manager has increased the productive capacity to 100%,

Thus, the **fixed cost per unit decreases**

Calculation

Let the Total Production Capacity was "Y"

Original Production = 0.7*Y ( Producing at 70%)

Total Fixed cost = 30 * 0.7*Y

= **21Y**

Now take the Case of Full Production. ( The fixed cost remains same )

Total Fixed Cost = 21Y

Fixed cost per unit = 21Y / Y

= Rs 21

Thus, the Fixed cost per unit has decreased from Rs 30 to Rs 21

Total Cost = Fixed Cost + Variable Cost

Total Cost = 21 + 60 = Rs 81

Profit = 100 - 81

= Rs 19 ( Situation 2)

**2) Yes**, the Export business should not be taken up as even after producing at full capacity, the selling price is Rs 6 less than the Cost of Rs 81.