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A company produces only one product. Normal capacity is 20000 units per year and the unit sales price is Rs.5 relevant costs are: Unit Variable

A company produces only one product. Normal capacity is 20000 units per year and the unit sales price is Rs.5 relevant costs are:

Unit Variable Cost

Total Fixed Cost

Materials

Rs.1.50

Director labour

1.20

Factory Overhead

0.45

Rs.15000

Marketing expenses

0.35

5000

Administrative expenses

6000

Required: Compute (2) break even point in units of product (2) break even point in sales (3) the number of units product that must be produced and sold to achieve a profit of Rs.10000 and (4) the sales revenue required to achieve a profit of Rs.10000. (20)

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