A Company is selling two products A and B. It sells the two products at the...

A Company is selling two products A and B. It sells the two products at the prices of AED 190 and 230 respectively. The finance department estimated the fixed cost for both products A and B as AED 2400 and 2550 and the variable cost to make a unit of each product is AED 70 and 60 respectively.

Compute the number of units the company must sell to Break-Even from each product? Compute the total revenue at these Break-Even Points?
Compute the number of units the company sells at which the two products have the same total cost? Compute the company total revenue for this number of sold units?

If the company used new technology in redesigning product A and the total fixed cost reduced to AED 2250. The marketing department estimated the new selling price per unit to be AED 240 and that the company would be break-even if they sale 10 units of product A. Compute the variable cost per unit and the total variable cost of the newly designed product A?

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The question test the concept of break even point analysis.

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