Problem 1: A gear manufacturing company sells gears at a selling price of Rs. 250 per unit.

The
company has fixed cost commitment of Rs. 20 lakhs and variable cost of Rs. 125 per unit.

Determine,

A. The break-even sales quantity

B. The break-even sales

C. Contribution

D. The margin of safety if the actual production quantity is 60,000 units

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Problem 2:

A cashew nut processing plant has fixed cost of Rs. 10,00,000, variable cost per unit of Rs.
100 per kg and selling price of Rs. 500 per kg. Find the break-even level of output. What
should be level of output if the owner wants to earn a profit of Rs. 6,00,000 in a year?

Problem 3:

 A company has three alternatives to meet the demand of a particular product, making the
product using process A, making the product using process B and buying the product, the
details of which are as follows
 Annual demand for the product is 10,000 units
A. What is the decision of the company?
B. At what annual volume should the company switch from buying to making using process
A?
C. At what annual volume should the company switch from process A to B?