Q1- Alhasan company produces plastic items. Plastic chairs has had low contribution to profits. Last year 20000 units were produced and sold. The selling
Q1- Alhasan company produces plastic items. Plastic chairs has had low contribution to profits. Last year 20000 units were produced and sold. The selling price was 20$ per unit with a variable cost of 18 and fixed cost of 70000 per year, a- What is the breakeven quantity for this product using graphical method. b- What is the marginal profit for last year C- The company is considering two alternatives to increase profit. The first method is to increase sales by 35% while the second method is to reduce variable cost by 50%. i. Assuming all other factors constant, which alternative will lead to a higher profit and by how much. ii. What are the factors that should be taken into consideration in each alternative to succeed in achieving such profit
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Lets break down and answer the problem step by step Given Units produced and sold 20000 units Selling price 20 per unit Variable cost 18 per unit Fixed cost 70000 per year Part a Breakeven Quantity us...See step-by-step solutions with expert insights and AI powered tools for academic success
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