1. The paras steel company has started a business of steel buckets. They have provided the following information regarding their costs

Variable cost=Rs.20

Fixed cost=Rs.50,000

Selling price=Rs 70

They can produce 2000 buckets a year. They need to make an informed decision on the following matters

1. They want to know the break even quantity
2. The manager wants to earn a profit of Rs.30,000.How many units have to be sold to achieve this target
3. Paras steel company feels that they can manufacture 600 buckets more per year with an additional fixed cost of Rs.2000, what should be the selling price so that they maintain the profit per bucket as at (ii) above.

Answer rating: 100% (QA)

Answer i Break even quantity Fixed Cost Contribution Margin per unit Fixed Cost Rs50000 Given Contri... View the full answer