Q.3. Two businesses Ab Ltd. and CD Ltd. sell the same type of product in the...

 

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Q.3. Two businesses Ab Ltd. and CD Ltd. sell the same type of product in the same type of market. Their budgeted profit and loss accounts for the current year ending March 31, are as follows: Particulars Sales AB Ltd. (Amount in Rs.) 1,50,000 CD Ltd. (Amount in Rs.) 1,50,000 Less: Variable Costs 1,20,000 1,00,000 Fixed costs 15,000 1,35,000 35,000 1,35,000 Net Budgeted profit 15,000 15,000 You are required to calculate: 1. Calculate the break-even point for each business 2. State which business is likely to be better off in conditions of i) heavy demand ii) low demand. Q.3. Two businesses Ab Ltd. and CD Ltd. sell the same type of product in the same type of market. Their budgeted profit and loss accounts for the current year ending March 31, are as follows: Particulars Sales AB Ltd. (Amount in Rs.) 1,50,000 CD Ltd. (Amount in Rs.) 1,50,000 Less: Variable Costs 1,20,000 1,00,000 Fixed costs 15,000 1,35,000 35,000 1,35,000 Net Budgeted profit 15,000 15,000 You are required to calculate: 1. Calculate the break-even point for each business 2. State which business is likely to be better off in conditions of i) heavy demand ii) low demand.

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1 Calculate the breakeven point for each business For both businesses the breakeven point can be cal... View the full answer