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Q.5. Two businesses, P Ltd. and Q Ltd. sell the same type of product in the same type of market. Their budgeted profit and loss
Q.5. Two businesses, P Ltd. and Q Ltd. sell the same type of product in the same type of market. Their budgeted profit and loss accounts for the coming year are as under: P Ltd. (Rs.) Q. Ltd. (Rs.) Sales 150000 150000 Variable Cost 120000 100000 Fixed cost 15000 35000 Budgeted Net profit 15000 15000 You are required to: a) Calculate the break-even point for each business b) Calculate the sales volume at which each business will earn Rs.5000 Profit. c) State which business is likely to earn greater profit in conditions of: i) Heavy demand for the product ii) Low demand for the product, and, briefly give your argument also
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