Question:
A company producing a single product sells it at Rs. 50 per unit. The unit Variable Cost is Rs. 35 and Fixed Cost amounts to Rs. 12 lakhs per annum. With this data, you are required to calculate the following, treating each as independent of the other:
1. P/V Ratio and BES.
2. New BES, if the Variable Cost increases by Rs. 3 per unit, without any increase in the Selling Price.
3. Increase in the sales required if profits are to be increased by Rs. 2.4 lakhs.
4. Percentage increase/decrease in the sales volume units to offset:
1. An increase of Rs. 3 in the Variable Cost per unit.
2. A 10% increase in the Selling Price without affecting the existing profit quantum.
5. Quantum of advertisement expenditure permissible to increase the sales by Rs. 1.2 lakhs, without affecting the existing profit quantum.