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A retail dealer in garments is currently selling 24,000 shirts annually. He supplies the following details for the year ended 31 December 2015: Rs. Selling

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A retail dealer in garments is currently selling 24,000 shirts annually. He supplies the following details for the year ended 31 December 2015: Rs. Selling price per shirt .............................................. 50 Variable cost per shirttMaterial + Labour) ............. 30 Fixed costs: Staff salaries for the year ....................................... 1,00,000 General ofce cost for the year ............................. 80,000 Advertising costs for the year ................................ 60,000 As a manager of the firm you are required to answer the following each part independently: i) Calculate the breakeven point and margin of safety in sales revenue and in sales units. ii) If it is decided to introduce selling commission of Rs.3 per shirt, how many shirts would require to be sold in a year to earn a net income of RS.300,000. iii) Assuming that for the year 2016 an additional staff salary of Rs.200,000 is anticipated, and price of a shirt is likely to be increased by 12%, what should be the breakeven point in number of shirts and sales revenue? iv) What will be the profit of the dealer if its sells 30000 shirts

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