Question

    In the above product mix, how many t-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.
    A 2570 Correct Answer Incorrect Answer
    B 2670 Correct Answer Incorrect Answer
    C 2750 Correct Answer Incorrect Answer
    D 2770 Correct Answer Incorrect Answer
    E 2850 Correct Answer Incorrect Answer

    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 = 5 Total t-shirts required = 5*550 = 2750 shirts

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