Company A and Company B, both under the same management, make and sell the same type of product. Their budgeted profit and loss accounts for January June 2002 are as under:

You are required to.

(i). Calculate the break-even point for each company. 

(ii). Calculate the sales volume at which each of the two companies will make a profit of Rs. 10,000. 

(iii). Assess how their profitability will change with decrease or increase in volume.

Transcribed Image Text:

Sales Less: Variable cost Fixed costs Company A Rs. 2,40,000 30,000 Rs. 3,00,000 2,70,000 30,000 Rs. 2,00,000 70,000 Company B Rs. 3,00,000 2,70,000 30,000