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The Saleem & Jamal Company manufactures an engine for carpet cleaners called the Snooper. Budgeted cost and revenue data for the Snooper are given below,
The Saleem & Jamal Company manufactures an engine for carpet cleaners called the "Snooper." Budgeted cost and revenue data for the "Snooper" are given below, based on sales of 40,000 units. Sales Rs 1,600,000 Less: Cost of goods sold 1,120,000 Gross margin Rs 480,000 Less: Operating expenses 100,000 Net income Rs 380,000 Cost of goods sold consists of Rs 800,000 of variable costs and Rs 320,000 of fixed costs. Operating expenses consist of Rs 40,000 of variable costs and Rs 60,000 of fixed costs. Required: a) Calculate the break-even point in units and sales rupees. b) Calculate the safety margin. c) Saleem & Jamal received an order for 6,000 units at a price of Rs 25.00. There will be no increase in fixed costs, but variable costs will be reduced by Rs 0.54 per unit because of cheaper packaging. Determine the projected increase or decrease in profit from the orde
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