Part A

X has $2,00,000$ investments in his business firm. He wants a $15$ per cent return on his money. From an analysis of recent cost figures, he finds that his variable cost of operating is $60$ per cent of sales, and his fixed costs are $80,000$ per year. Show computations to answer the following questions:

What sales volume must be obtained to break even?

What sales volume must be obtained to get a $15$ percent return on investment?

X estimates that even if he closed the doors of his business, he would incur $25,000$ as expenses per year. At what sales would he be better off by locking his business up$?$

Part B

You are given the following particulars to calculate:

Break$-$even point

Fixed cost

$1,50,000$

Variable cost

$15$ per unit

Selling price

$30$ per unit