Question
Dhaka Brothers operates a small RMG factory with fixed expenses of BDT 500,000 per year. They sell a standard design of formal shirts to European
Dhaka Brothers operates a small RMG factory with fixed expenses of BDT 500,000 per year. They sell a standard design of formal shirts to European customers for a standard price of BDT 2,000 per unit . Variable costs for each unit of the shirt is BDT 1,200. They are subjected to pay 40% tax on their income. Target net income is $ 159,600.
3.1 How many units they need to sell to break-even?
3.2 How many units do they need to sell to earn a net income of BDT 250,000?
3.3 Assume, they have started selling standard design of formal trousers for BDT 1,500. Variable costs for each unit of the trouser is BDT 1,000. For each unit of formal shirt, they will sell one unit of trouser (i.e. sales mix is 1:1). How many units of shirts and trousers they need to sell to break-even?
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