A company is making a loss of Rs. 40,000 and relevant information is as follows: Sales Rs. 1, 20,000; Variable Costs Rs. 60,000; Fixed costs Rs. 1, 00,000.Loss can be made good either by increasing the sales price or by increasing sales volume. What are Break even sales if (a) Present sales level is maintained and the selling price is increased. (b) If present selling price is maintained and the sales volume is increased. What would be sales if a profit of Rs. 1, 00,000 is required?
A company is making a loss of Rs. 40,000 and relevant information is as follows: Sales Rs. 1, 20,000; Variable Costs Rs. 60,000; Fixed costs Rs. 1, 00,000.Loss can be made good either by increasing the sales price or by increasing sales volume. What are Break even sales if (a) Present sales level is maintained and the selling price is increased. (b) If present selling price is maintained and the sales volume is increased. What would be sales if a profit of Rs. 1, 00,000 is required?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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A company is making a loss of Rs. 40,000 and relevant information is as follows:
Sales Rs. 1, 20,000; Variable Costs Rs. 60,000; Fixed costs Rs. 1, 00,000.Loss can be made good either by increasing the sales price or by increasing sales volume. What are Break even sales if
(a) Present sales level is maintained and the selling price is increased.
(b) If present selling price is maintained and the sales volume is increased. What would be sales if a profit of Rs. 1, 00,000 is required?
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