Answer / d.ravindran

In the declining stage , the company may have enough
resources(Brand, employees, market etc) , but as the
product got saturated or rejected by some reasons like
competitions, trend change etc.
the cause for the decline has to be identified. Then if
the product is saturated , the company should go for
diversification or introduce new varieties in sale
product , rather than giving discounts consumer promotion
can be given to keep the existing consumers with them and
to attract the new ones at less additional investments .
Regarding advertisements , repositioning strategies should
be done .

The following data are available from the records of a company Sales Rs.60,000 Variable cost Rs.30,000 Fixed Cost RS.15,000 You are required to i) Calculate the P/V Ratio, Break-Even Point and Margin of Safety at this level. ii) Calculate the above with the effect of 10% increase in selling price. iii) Calculate the above with the effect of 10% decrease in selling price.

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