000 ton part of your answer. Rs.2A firm manufactures a product. Information regarding productionthe product is as under:Production Capacity25.000 unitsSelling price per unitRs. 25Direct material per unitRs. 3Productive wages per unitOther variable expenses per unit Rs. 1.25Fixed Cost :Rs. 75,000 per annum upto capacity utilization of 50%Rs. 90,000 per annum above capacity utilization of 50% and upto 80%Rs. 1,05,000 per annum on capacity utilization above 80%Calculate :(i) Break Even Sales(ii) Profit at capacity utilization of 40%, 75% and 90%(iii) Sales of earn profit of Rs. 45.000(iv) Margin of safety at capacity utilization of 60%(v) If selling price is reduced to Rs. 22.50 per unit, sales can beachieved at 18,750 units. Is it advisable to reduce the selling priceif current sales is 17.500 units at selling price of Rs. 25 per unit?(vi) Is it advisable to incur advertisement expenses of Rs. 12,500instead of reducing selling price and achieve sales of 18,750ite​

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