Business Question

Question

Al Manahi Products, the leading dairy products makers is conducting a study on the below for some important decision making:

You are required to:

1. Calculate Break – Even Point of each product. (5 Marks)

2. The company prefers to maintain a desired profit of RO 10,000. Identify the sales volume to maintain the desired profit. (2.5 Marks)

3. Compute Margin of Safety for both products. (2.5 Marks)

4. The business is expected to go through ups and downs in the demand. So state which product is likely to earn greater profit in conditions of heavy demand for the product and low demand for the product. (5 Marks)

5. Evaluate the importance of the role of BEP in taking business decisions with appropriate literature review.