Two businesses, AB Ltd. and CD Ltd. sell the same type of product in the same market. Their budgeted profit and loss accounts for the year ending 30th June 20XX are as follows:

Now,

(a) calculate the break-even point of each business, and

(b) state which business is likely to earn greater profits in conditions of (i) heavy demand for the product, (ii) low demand for the product.

AB Ltd. Sale Rs 1,50,000 CD Ltd. Rs 1,50,000 Less Cost Variable 1,20,000 1,00,000 Fixed 15,000 1,35,000 35,000 1,35,000 Net budgeted profit 15,000 15,000