Illustration 13: 10 The Price Structure Of A Cycle Made By The Visu Cycle Co. Ltd. Is As follows: Per Cycle Materials Labour Variable Overheads 20 60 20 100 Fixed Overheads Profit Selling Price 50 50 200 This is based on the manufacture of one lakh cycles per annum. The company expects that due to competition they will have to reduce selling prices, but they want to keep the total profits intact. What level of production will have to be reached, i.e., how many cycles will have to be made to get the same amount of profits, if: (a) the selling price is reduced by 10%? (b) the selling price is reduced by 20%