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ABC Company manufactures a product which sells for R. 5 . At present, the company produces and sells 50,000 unifs.per year. Unit variable manufacturing and
ABC Company manufactures a product which sells for R. 5 . At present, the company produces and sells 50,000 unifs.per year. Unit variable manufacturing and marketing expenses are Rs. 2.50 and Rs. 0.50 respectively. Fixed FOII are Rs. 70,000 and Fixed Marketing. Fxpenses are Rs.30.000. Propasal: The sales manager has proposed that the sales price be increased to Rs. 6 per unit. To maintain the present sales volume, advertisement must be increased. The company's profit objective is 10% of sales. Required: 1. What is current breakeven point ii units and rupees? 2. The additional expenditure the co inpany can afford for advertising under the proposal. 3. The new Breakeven point in units and rupecs, using the Rs. 6 sales price and the additional advertising expenditure, calculated in requirennent 2
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