The Financial Accountant of PSC Ltd. has
he year ended 31st March. 2010
presented the following Product Performance Report for
Particulars
Sales
7 10 per unit
Totai Vaniabie Cost
Foxed Cost
10,00,000
7.00,000
2,00,000
1,00.000
Profit
The Marketing Manager of the company has come up with a proposal that if the selling price of the
hand the Costing
product is reduced by 10% the quanüty sold will go up by 25%. On the other
Department is of the opinion that as most of the competitors have higher prices, the selling price
is
should be increased by 10%. The Marketing Manager has apprehension that if the seling price
ncreased by 10% the quantity sold wil! fall by 20%.
take a decision
You are invited by the company to analyse the situation and advise the company to
wn reasons.
Wnetter :
The
2. The
1.
Seling Price shoud be increased or
Seling Prce shoud be reduced or
3 The Seing Price should be let unchanged.