if in the third quarter the company reduces the selling price by re 1 and increases 608781

A company which recently launched a new product reviewed the operational performance after six months. The profit statements relating to last two quarters are as follows:

	Quarter I Rs. Don't use plagiarized sources. Get Your Custom Essay on if in the third quarter the company reduces the selling price by re 1 and increases 608781 Get an essay WRITTEN FOR YOU, Plagiarism free, and by an EXPERT! Just from $10/Page Order Essay	Quarter II Rs.
No. of units sold	10,000 units	15,000 units
Selling price per units	12	12
Direct materials	25,000	40,000
Direct wages	25,000	35,000
Production overheads	35,000	40,000
Total	85,000	1,15,000
Gross profit	35,000	65,000
Selling ! administrative overheads	40,000	45,000
Net profit/loss	(5,000)	20,000

Required:

Calculate the BEP in units and the sales value for a quarter.
If the company supplies 5,000 units over and above the sales of the second quarter to a special customer (which sales will not affect the regular market), what selling price should be quoted to earn a profit of Rs. 3,000 after meeting the special expenses of Rs. 2,000?
If the selling commission is increased by 10% on sales, what quarterly unit sales will be required to earn a return of 15% on the investment of Rs. 1,00,000 in this line of product?
If in the third quarter, the company reduces the selling price by Re 1 and increases the advertisement expenses by Rs. 10,000, the sales volume will increase by 20% over that of the second quarter. Should this plan be implemented?

superadmin