Two manufacturing companies which have the following operating details decide to merge. Assuming that the proposal is
Question:
Two manufacturing companies which have the following operating details decide to merge.
Assuming that the proposal is implemented, calculate:
(i). Break-even sales of the merged plant and the capacity utilisation at that stage.
(ii). Profitability of the merged plant at 80% capacity utilization.
(iii). Sales turn over of the merged plant to earn a profit of Rs. 75 lakhs.
(iv). When the merged plant is working at a capacity to earn a profit of Rs. 75 lakhs what percentage increase in selling price is required to sustain an increase of 5% of fixed overheads.
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To calculate the breakeven sales profitability at 80 capacity utilization sales turnover needed for a profit of Rs 75 lakhs and the percentage increase in selling price required to sustain a 5 increas...View the full answer
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