XYZ Corporation has a production (and sales) capacity of Rs.10,00,000 per month. Its fixed costs are Rs.3,50,000 per month and the variable costs over a considerable range of volume are Rs.0.50 per Rupees of sales.
1 Determine annual break-even point and develop break-even graph.
2 Determine the effect on break-even point if fixed cost were decreased by 10% and the variable cost per unit are increased by the same percentage.