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Rent The Romeo Shoe co., already selling the sports shoes is trying to find out the profitability of opening another store, which will have the
Rent The Romeo Shoe co., already selling the sports shoes is trying to find out the profitability of opening another store, which will have the following expenses and revenues Per pair (Rs.) Annual fixed costs: S.P 30.00 60,000 V.C. 19.50 Salaries 2,00,000 Salesmen 1.50 Advertising 80,000 Comm. Total VC 21.00 Other F.C. 20.000 Total F.C. 3,60,000 a) Calculate the annual BEP in units and in value. b) Also determine the Profit or Loss if35,000 pair of shoes are sold. c) The sales comm. is proposed to be discontinued, but instead a fixed amount of Rs.90,000 is to be incurred in fixed salaries. A reduction of 5% in S.P. is also proposed. Find BEP in units. d) It is proposed to pay the store manager 50 paise per pair as further comm. The S.P. is also proposed to be increased by 5%. Find out the BEP in units. e) If the stores manager was to be paid 30 paise per pair sold in excess of break-even-point, what would be stores net profit if 50,000 pairs were sold
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