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A firm sells 2 0 0 0 baskets at Rs . 1 0 0 each. The Basket has a making charge of Rs 5 0

A firm sells

2000

baskets at Rs

. 100

each. The Basket has a making charge of Rs

50

each and a fixed operating cost of manufacture of Rs

. 50, 000 /

year

.

Calculate the Contribution and DOL. Also show the impact if SP increases by

50 %

on the contribution and DOL. What does the change in DOL signify?

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