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ASAP Q1. A business firm makes a single product from a plant having a capacity of 60,000 units per year. The results for the six-month

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Q1. A business firm makes a single product from a plant having a capacity of 60,000 units per year. The results for the six-month period ended on 31st March, 2021 are shown below: Amt. Rs. 6,000,000 Items Amt. Rs. Sales 20,000 units @ Rs 300 per unit Costs: Direct materials 2,200,000 Direct Labour 640,000 Production overheads (90% fixed) 1,600,000 Selling and Admin. overheads (all fixed) 1.960,000 Loss 6,400,000 (400,000) The directors agree that this situation is utterly unsatisfactory. They propose cutting the price by Rs 20 per unit, which they believe would stimulate sufficient volume to utilize all of the capacity during the next six months ending with 30th Sept. 2021. Requirements of the question: a. Calculate the break-even point in units for the six-month period ended on 31/3/2021 b. Calculate the break-even point in units for the six-month period ended on 30/09/2021 C. Calculate the profit for the six months to 30/09/2021 assuming that the increase in sales can be achieved d. Calculate the profit and the break-even point for the entire next financial year of 12 months if the new price as suggested by the directors remains in force, but the fixed costs increase by 10% and variable costs increase by 4% because of inflation

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