Question: (a) Explain the following terms with an example each. Loss Leader pricing, Barter, Warranty, and Service Contracts (3) (b) The owner of an ice cream

(a) Explain the following terms with an example each. Loss Leader pricing, Barter, Warranty, and Service Contracts (3) (b) The owner of an ice cream parlor was planning to expand his room. On the eve of the expansion, he did a cost audit of his existing operations. These are the facts he found. The rent paid for the parlor = is Rs. 35,000 per month. There were alied costs like cleaning, telephone, and electricity, which amounted to Rs. 12,000 monthly. He employed two salespersons and paid each a monthly salary of Rs. 10,000. He sold ice cream at Ris. 800 per kg, which he sourced at Ris. 300 . Currently, he sells 500kgs of ice cream monthly. a. Find the break-even point for the ice cream parlor. (2) b. What is the profit he is making now? (2) The owner plans to add some extra space to the parlor, costing him Rs. 15,000 monthly rent. He also wants to add one more salesperson at the same salary of Rs. 10000 to look after the increased flow of customers. He also expects the allied costs (cleaning etc.) to go up by 20%. i. What is the new break-even point of the parlor? (2) ii. His sales went up by 10%. What is his new profitloss? (2) (a) Explain the following terms with an example each. Loss Leader pricing, Barter, Warranty, and Service Contracts (3) (b) The owner of an ice cream parlor was planning to expand his room. On the eve of the expansion, he did a cost audit of his existing operations. These are the facts he found. The rent paid for the parlor = is Rs. 35,000 per month. There were alied costs like cleaning, telephone, and electricity, which amounted to Rs. 12,000 monthly. He employed two salespersons and paid each a monthly salary of Rs. 10,000. He sold ice cream at Ris. 800 per kg, which he sourced at Ris. 300 . Currently, he sells 500kgs of ice cream monthly. a. Find the break-even point for the ice cream parlor. (2) b. What is the profit he is making now? (2) The owner plans to add some extra space to the parlor, costing him Rs. 15,000 monthly rent. He also wants to add one more salesperson at the same salary of Rs. 10000 to look after the increased flow of customers. He also expects the allied costs (cleaning etc.) to go up by 20%. i. What is the new break-even point of the parlor? (2) ii. His sales went up by 10%. What is his new profitloss? (2)
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