Market Well Ltd manufactures filing cabinets. For the current year, the company expects to sell 4,000 cabinets involving a loss of `2,00,000. Only 40 per cent of the plant’s normal capacity is being...

Market Well Ltd manufactures filing cabinets. For the current year, the company expects to sell 4,000 cabinets involving a loss of `2,00,000. Only 40 per cent of the plant’s normal capacity is being utilised during the current year. The fixed costs for the year are `10,00,000 and fully variable costs are 60 per cent of sales value. You are required to

1. Calculate the break-even point;

2. Calculate the profit if the company operates at 70 per cent of its normal capacity;

3. Calculate the sales required to achieve a profit of `60,00,000;

4. Calculate the revised break-even point if the existing selling prices are decreased by 10 per cent, the total fixed and variable expenses remaining the same.