Two businesses, p Itd. And q Itd. Sell the same type of product in the same type of marke Their budgeted profit and loss accounts for the coming year are as under: P Ltd. Q Ltd. Sales 1,50,000 1,50,000 Less: Variable Costs 1,20,000 1,00,000 Fixed Costs 15,000 1,35,000 35,000 1,35,000 Budget Net Profit 15,000 15,000 You are required to: Calculate the break-even point for each business Calculate the sales vohume at which each business will earn rs.5,000 Profit. State which business is likely to eam greater profit in conditions of 1. Heavy demand for the product 2. Low demand for the product, and, briefly give your argument also.

Two businesses, p Itd. And q Itd. Sell the same type of product in the same type of marke Their budgeted profit and loss accounts for the coming year are as under: P Ltd. Q Ltd. Sales 1,50,000 1,50,000 Less: Variable Costs 1,20,000 1,00,000 Fixed Costs 15,000 1,35,000 35,000 1,35,000 Budget Net Profit 15,000 15,000 You are required to: Calculate the break-even point for each business Calculate the sales vohume at which each business will earn rs.5,000 Profit. State which business is likely to eam greater profit in conditions of 1. Heavy demand for the product 2. Low demand for the product, and, briefly give your argument also.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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