Uranus Limited (UL) manufactures and sells two products, X1 and Y1. Following is the latest information...
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Uranus Limited (UL) manufactures and sells two products, X1 and Y1. Following is the latest information pertaining to X1 and Y1: Sales volume Selling price per unit Variable cost per unit Fixed factory overheads Fixed selling and distribution overheads X1 5000 4,400 3,000 Units Rupees Y1 2500 2,200 1,500 5,400,000 4,500,000 UL's finance director has suggested that sales of X1 can be increased by spending Rs. 300,000 on advertisement and reducing selling price by 5%. Sales volume of XI is expected to increase by 20% as a result of adopting his suggestions. Required: (a) Compute the existing overall break-even sales revenue and margin of safety units. (b) Advise UL whether it should go ahead with his suggestions or not. (05) (02) Uranus Limited (UL) manufactures and sells two products, X1 and Y1. Following is the latest information pertaining to X1 and Y1: Sales volume Selling price per unit Variable cost per unit Fixed factory overheads Fixed selling and distribution overheads X1 5000 4,400 3,000 Units Rupees Y1 2500 2,200 1,500 5,400,000 4,500,000 UL's finance director has suggested that sales of X1 can be increased by spending Rs. 300,000 on advertisement and reducing selling price by 5%. Sales volume of XI is expected to increase by 20% as a result of adopting his suggestions. Required: (a) Compute the existing overall break-even sales revenue and margin of safety units. (b) Advise UL whether it should go ahead with his suggestions or not. (05) (02)
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a Existing overall breakeven sales revenue and margin of safety units To compute the existing overall breakeven sales revenue we first need to calculate the total fixed costs The total fixed costs inc... View the full answer
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