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Assignment 1: University of Balochisatn, Quetta Directorate of Distance Education

The document is an assignment for a shopkeeper selling trousers. It provides information about the average selling price (Rs. 15), average variable cost (Rs. 9), and unit contribution (Rs. 6). It then asks the student to: (1) Calculate the break-even point in units if fixed costs are Rs. 100,000 per year. (2) Calculate the break-even point in rupees if the owner desires a profit of Rs. 25,000. (3) Calculate the new break-even point in units if fixed costs rise to Rs. 110,000. (4) State whether the break-even volume would fall if the average selling price rose

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51 views1 page

Assignment 1: University of Balochisatn, Quetta Directorate of Distance Education

The document is an assignment for a shopkeeper selling trousers. It provides information about the average selling price (Rs. 15), average variable cost (Rs. 9), and unit contribution (Rs. 6). It then asks the student to: (1) Calculate the break-even point in units if fixed costs are Rs. 100,000 per year. (2) Calculate the break-even point in rupees if the owner desires a profit of Rs. 25,000. (3) Calculate the new break-even point in units if fixed costs rise to Rs. 110,000. (4) State whether the break-even volume would fall if the average selling price rose

Uploaded by

Noshki New
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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UNIVERSITY OF BALOCHISATN, QUETTA

DIRECTORATE OF DISTANCE EDUCATION

Assignment 1
A Shopkeeper sells trousers. The average selling price is Rs. 15 and the average variable cost
(cost price) is Rs. 9. Thus, every time the shop sells a trouser 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 shop (its operating expenses) are Rs. 100,000
per year. Find Break-even in units?

(b) If the owner desired a profit of Rs. 25,000, what will be break-even point in Rupees?

(c) If fixed costs rose to Rs. 110,000, break-even in units volume would be?

(d) If the average selling price rose to Rs.16, break even volume would fall?

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