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A store sells t-shirts. The average selling price is Rs. 15 and the average variable...

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Accounting

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?

(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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