Q.NO.2Max marks: 4

Danish Enterprises is a renowned manufacturer of models equipment. Company currently producing two types of models, one for military use and other for commercial market. Management of the company has tasked management accountant to perform various calculations to understand business operations in detail.

For the last financial year company's operational data has been produced as below.

Military model

Commercial model

Units producedand sold

1,000

4,000

Unit selling price

4,000

2,500

Component cost

1,500,000

1,000,000

Assembly labor

700,000

500,000

Electricity

400,000

200,000

Material handling ( All variable)

200,000

100,000

Supplies(All variable )

100,000

50,000

Shipping(Allvariable)

150,000

150,000

Other common fixed costs are as under:-

Factory rent150,000

Factory depreciation50,000

Factory salaries400,000

Miscellaneous selling cost300,000

Miscellaneous admin cost200,000

Required:

What is the composite breakeven point of the company in units and amount at the given sales mix? Calculate individual units and amount also.