07-08-2010, 03:15 PM
Question
Company XYZ started as entrepreneurial venture with an initial capital of
Rs. 1,500,000. Rent of the building is 20,000, fixed marketing cost 50,000
and fixed administration cost is 30,000. The raw material required to
produce one unit is bought at Rs. 30 which after processing is converted into
finished product and is sold at Rs. 50 each.
Required:
A) Calculate the number of units that must be sold to reach break even point.
B) Also calculate the number of units to be sold when you want to earn a
profit of Rs. 40,000.
Company XYZ started as entrepreneurial venture with an initial capital of
Rs. 1,500,000. Rent of the building is 20,000, fixed marketing cost 50,000
and fixed administration cost is 30,000. The raw material required to
produce one unit is bought at Rs. 30 which after processing is converted into
finished product and is sold at Rs. 50 each.
Required:
A) Calculate the number of units that must be sold to reach break even point.
B) Also calculate the number of units to be sold when you want to earn a
profit of Rs. 40,000.