Company H produces and sells a product. The machines are rented from the manufacturer. The following expenses and revenue relationship exist at present:
Fixed Monthly Expenses:
Machine Rent
1,535
Room Rent
288
Service Charge for Machine
727
Other Fixed Costs
50
2,600
Other Data:
Rs. per unit
Selling Price
50
Variable Cost
40
Contribution
10
Consider each question independently and then give your answer: What is the monthly BEP (in units and in rupees)? If 20,000 units are sold during the year, what will be the company’s net income? If the room rental is doubled, what will be the monthly BEP (in units and in rupees)? In addition to the fixed machine rent, if the company pays the machine manufacturer an additional50 paise per unit of goods sold, what will be the monthly BEP (in units and in rupees)? In addition to the fixed room rent, if the company pays the landlord an additional 10 paise per unit of goods sold in excess of BEP as per (i) above, what will be the annual income of the company at a sales level of 20,000 units for the year?