Question

The price structure of a pocket calculator manufactured by M/s accurate Calculators is as follows.
particulars per Calculator Material cost. 120
Labour cost 40
variable Overheads 40
Fixed Overheads 100
Total cost 300
Profit 100
selling price. 400
This cost structure is based on 1000 calculators per annum. In order to face the increasing intensity of the competition, the company wants to reduce the price without affecting the existing profit.
You are required to find out the sales volume.
1) The selling price is decreased by 10%. 2) The selling price is decreased by 20%. 3) The selling price and labour cost are decreased by 5%.
You are further required to find out B.E.P and margin of safety at all the three levels.
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Answer 1

Answer:

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