Answer to Question #256046 in Other for srish

Question

. Futuristic was a newly setup firm in 2019. It is in the business of providing artwork. However, being in the business of standard art objects (non-essential items), it did not do well once it was hit by COVID-19. It has a selling price of ₹2,500 per piece and a variable cost of ₹1,000 per piece. It incurs an annual fixed cost of ₹30,00,000. The manager of the business wishes to know-  the number of art pieces they must sell to be at the break-even point  the contribution margin  whether the firm is earning a profit or incurring a loss by selling 2,100 art pieces b. To combat the current difficult situation, the manager plans to curb the variable expenses and bring them to ₹500 per piece. Compute the new break-even point and contribution margin. Analyze and explain the movement in contribution margin to the manager

Answer 1

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