Super-Power ltd sold 20,000 units of products at Rs 40 per unit. Variable costs are Rs 28 per unit of which Rs 22 per unit are manufacturing costs and Rs 6 per unit are selling costs. Fixed costs are incurred uniformly throughout the year and the amount of manufacturing fixed costs are Rs 56000 and selling fixed costs are Rs 40000 . The finance manager wants to know the following:

a) If the demand for their product does not remain the same; how much fall in the demand the company can sustain before it incurs loss

b) If the company wants to earn a desired profit of Rs 180000; how many units will be required to be sold?

c ) Considering the prevailing conditions in the market the variable manufacturing cost are likely to increase by Rs 2 and variable selling costs are likely to increase by Rs 1. Similarly the fixed manufacturing costs and fixed selling costs are also likely to increase by 3% and 2 % respectively. The finance manager would like to know the impact of the same on profits at the current level of sales and selling price