1.) Assume that as an investor, you are planning to enter the
construction industry as a panel formwork supplier. The potential
number of forthcoming projects, you forecasted that within two
years, your fixed cost for producing formworks is Rs. 300,000. The
variable unit cost for making one panel is Rs. 15. The sale price
for each panel will be Rs. 25. If you charge Rs. 25 for each panel,
how many panels you need to sell in total, in order to start making
money?
2.) Suppose you intend to open a franchise business to supply
a nationally-known line of women’s shoes. You’ve found a good
location in Abbottabad to open your shop, and have determined that
the average prices and costs of operating the store are:
Price = Rs. 50 per pair Cost = Rs. 30 per pair
Rent = Rs. 2,500 per month Insurance = Rs. 500 per month
Utilities & Telephone = Rs. 300 per month
In addition, you plan to hire two sales ladies on a commission
basis of 10% in order to provide them with incentive to sell shoes.
You are required determine the breakeven point in Rupees?
3.) A manufacturing company supplies its products to
construction job sites. The average monthly fixed cost per site is
Rs. 4,500, while each unit cost Rs. 35 to produce and selling price
is Rs. 50 per unit. Determine the monthly breakeven volume.
4.) A store sells t-shirts. The average selling price is Rs.
15 and the average variable cost (cost price) is Rs. 9. Thus, every
time the store sells a shirt it has Rs. 6 remaining after it pays
the manufacturer. This Rs. 6 is referred to as the unit
contribution.
(a) Suppose the fixed costs of operating the store (its
operating expenses) are Rs. 100,000 per year. Find Break-even in
units? (Round-Up to the nearest whole number)
(b) If the owner desired a profit of Rs. 25,000, how many
units shall be sold? (Round-Up)