1. XYZ Ltd. is a manufacturing company producing product branded kipya. The company has a production capacity of 1,000 units of the product per day.

The following information relates to one unit of the product.

Materials Sh.120

Labor 40

Variable overheads 40

Fixed overheads 100

Selling price 140

Required:

1. Calculate the Break-Even-Point of sales at the current selling price for 1,000 units
2. The marketing manager intends to reduce the selling price by either 10% or 20% for the 1,000 units without affecting the total profit. Advise the marketing manager on the required sales volumes under the two options.