Question
In the above product mix, how many shirts should be
sold by Deepak Ltd to break even? Refer to the following information to answer the next 4 questions (Q5 to Q8) Deepak Ltd produces and sells two products – shirts and trousers. The details of the 2 products are as under: Product T-Shirt Shirt Sales price per unit Rs.800 Rs.1400 Variable Cost per unit Rs.380 Rs.420 Deepak Ltd’s fixed costs are Rs.43,89,000 per period.Solution
Break even = fixed cost/contribution In the given product mix, break even = fixed cost/contribution = Rs.43,89,000/7980 = 550 mixes Shirts in the mix = 6 Total shirts required = 6*550 = 3300 shirts
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