During the current year AB Ltd. Should a profit of Rs. 1,80,000 on a sale of Rs. 30,00,000. The various expenses were Rs. 21,00,000. You are required to calculate: 1. The break even sales at present.

 To calculate the break-even sales, we need to determine the level of sales at which the company's total revenue equals its total expenses, resulting in zero profit. The break-even sales can be calculated using the following formula:

Break-even Sales = Total Fixed Costs / Contribution Margin

Where:

• Total Fixed Costs: The sum of all fixed expenses incurred by the company.
• Contribution Margin: The difference between the selling price per unit and the variable cost per unit.

Let's calculate the break-even sales for the given scenarios:

Given data:

• Profit on Sale = Rs. 1,80,000
• Sale = Rs. 30,00,000
• Expenses = Rs. 21,00,000

1. The break-even sales at present: To calculate the break-even sales at present, we need to consider the given profit on sale of Rs. 1,80,000 as an additional expense to be covered.Total Fixed Costs = Expenses + Profit on Sale Total Fixed Costs = Rs. 21,00,000 + Rs. 1,80,000 = Rs. 22,80,000Contribution Margin = Selling Price per Unit - Variable Cost per UnitBreak-even Sales at Present = Total Fixed Costs / Contribution Margin Break-even Sales at Present = Rs. 22,80,000 / (Rs. 30,00,000 / Number of Units Sold)
2. The break-even sales if variable cost increased by 55%: In this scenario, we need to adjust the variable cost per unit by increasing it by 55% and then calculate the new break-even sales.New Variable Cost per Unit = Current Variable Cost per Unit * (1 + 55%) New Variable Cost per Unit = Current Variable Cost per Unit * 1.55Break-even Sales with Increased Variable Cost = Total Fixed Costs / Contribution Margin Break-even Sales with Increased Variable Cost = Rs. 22,80,000 / (Rs. 30,00,000 / New Number of Units Sold)
3. The break-even sales to maintain the profit as at present, if the selling price is reduced by 6%: In this scenario, we need to adjust the selling price per unit by reducing it by 6% and then calculate the new break-even sales required to maintain the current profit.New Selling Price per Unit = Current Selling Price per Unit * (1 - 6%) New Selling Price per Unit = Current Selling Price per Unit * 0.94Break-even Sales with Reduced Selling Price = Total Fixed Costs / Contribution Margin Break-even Sales with Reduced Selling Price = Rs. 22,80,000 / (New Selling Price per Unit - Variable Cost per Unit)

Please note that the Contribution Margin will vary depending on the revised selling price and variable cost per unit for each scenario.

To get the specific break-even sales amount for each scenario, we would need to know the current selling price per unit and the current variable cost per unit. With that information, we can calculate the number of units sold to arrive at the break-even sales for each scenario.

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