Question: answer a and b please 11. Mr. Mohammed is the Marketing director of Hilti Division in Bin Salim Enterprise in Sultanate of Oman. Presently he
11. Mr. Mohammed is the Marketing director of Hilti Division in Bin Salim Enterprise in Sultanate of Oman. Presently he is working on a special marketing campaign. He has given a new idea that we should increase the display space and also install new security system. This will increase $25,500 in fixed cost, which is presently $202,500. In addition, Mr. Mohammed is proposing that a 5% decrease in price ($30 to $28.50) will produce a 20% increase in sales volume. Present sales volume is 20,000 units and sales price is $30 per unit. Variable cost will remain at $16.50 per unit. Required: a) Calculate the current break-even point in units and compare it to the break-even point in units if Mr. Mohammed's idea is accepted. (3 marks) b) Prepare CVP income statement for the current operations and after Mr. Mohammed's changes are introduced. (2 marks)
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