ABC and XYZ Ltd produce carbonated drinks in the southern part of India which has been experiencing drought for the past few years. Production of carbonated drinks requires extensive use of water and energy.

Below is the date for the two organisations:

	ABC Ltd	XYZ Ltd
Sales Price (per unit)	$ 20	$21
Variable Manufacturing cost per unit	$11	$10
Variable selling cost per unit	$3	$2.5
Fixed Cost (overheads 68% and selling cost 32%)	$792,000	$847000

Required:

1. Calculate break-even point in both dollars and units.

[5 marks]

2. Calculate the number of units ABC and XYX must sell to earn a profit of $200,000 for each.

[4 marks]

3. Why should managers of ABC Ltd and XYZ Ltd know the break-even point?

[1 mark]

4. Will fixed costs remain fixed for ever in these organisations?

[2 marks]

1. Explain three potential social and environmental impacts of these two organisations?

[3 marks]