Question: Gafat Engineering Ethio Plc manufactures two types of TV sets - LCD and CRT - both having only one model. The LCD and CRT television sets sell for Br 9,000 and Br5,000, respectively. The company sells its products through its own stores and other outlets. Total fixed expenses are Br15,000,000 per month. Variable expenses and monthly sales data are given below: LCD CRT Variable expenses Br5,000 Br2,000 Monthly sales in units 2,000 3,000
Required: (unless stated figures should be computed for one month)
a) Determine breakeven total volume of sales and sales volume for each product.
b) Determine sales volume and sales revenue for the company to earn Br500,000 profit after 30% profit tax.
c) The company has planned to incur Br 200,000 monthly selling (promotional) expenses to increase sales volume for its LCD TV sets to 4,000. If the plan materializes and other things remain constant, determine breakeven sales volume and sales revenue for the company.