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Problem.4 company A and Company B, both under the same management, make and sell the same type of product. Their budgeted profit and loss account
Problem.4 company A and Company B, both under the same management, make and sell the same type of product. Their budgeted profit and loss account for June are as under: Company A Company B $ $ $ $ Sales 3,00,000 3,00,000 2,00,000 Less: Variable cost 2,40,000 Fixed cost 30,000 2,70,000 70,000 2,70,000 Profit 30,000 30,000 Your are required to: (i) Calculate the break-even point for each. (ii) Calculate the sales volume at which each of the two companies will make a profit of $10,000. (iii) Assess how their profitability will change with increase or decrease in sales volume
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