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A company produces only one product. Normal capacity is 0000units per year and the unit sales price is Rs.5 relevant costs are:
Unit variablecost Total fixed cost
Materials Rs.1.00
Directlabor 1.20
Factoryoverhead 0.50 Rs.15000
Marketingexpenses 0.30 5000
Administrativeexpenses 6000
Required: Compute (2) breakeven point in units of product (2) break even point in sales (3) the number of unit product that mustbe produced and sold to achieve a profit of Rs.10000 and (4) the sales revenue required to achieve a profit of Rs.10000.
Increase in prepaid insurance expense, an asset, decreasing both net income and retained earnings by $6,000 and decrease in cash of $6,000.
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