Entrepreneur creates his own business.

According to Joseph Schumpeter, an entrepreneur is one who innovates, raises money, collects inputs, organizes talents, provides leadership and sets the organization. According to Peter Drucker, an entrepreneur is one who always searches for change, response to it and exploit it as an opportunity. Entrepreneurship is a risk taking ability of an individual, to achieve pre-determined organizational goals. According to Higgins, eship is the function of seeing investment and production opportunity, organizing an enterprise to undertake a new production process, Raising capital, hiring labor, arranging for the supply of raw material and selecting managers for day to day operation of eship. ENTREPRENEUR V/S ENTREPRENEURSHIP 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. Refers to a person/refers to a process. Visualiser/vision Creator/creation Organizer/organization Innovator/innovation Technician/technology Initiator/initiative Decision maker/decision Risk taker/risk taking Communicator/communication Administrator/administration Leader/leadership Motivator/motivation

PHASES OF ENTREPRENEURSHIP DEVELOPMENT Initial phase- creation of awareness about the entrepreneur opportunities. Development phase- implementation of training program to develop different types of skills Support phase-

CHARACTERISTICS OF ENTREPRENEURSHIP 1. Innovation- innovation involves problem solving and the entrepreneur is a problem solver. An entrepreneur is basically an innovator who introduces something new in the economy. 2. High achievement- the achievement motive is, by assumption a relatively stable enduring characteristic of an individual. Achievement motive can be increased by deliberate efforts. Various studies on psychological roots of entrepreneurship reveal the presence of high achievement among successful entrepreneurs.

3. Managerial skill and leadership- financial skills are only of secondary importance. A person who is to become an industrial entrepreneur must have more than the drive to earn profit. He must have the ability to lead and manage. 4. Group level pattern- entrepreneurial characteristics are found in clusters which may qualify themselves as entrepreneurial groups. Entrepreneurial activity is generated by the particular family background experience as a member of certain groups and as a reflection of general values. 5. Organization building- organization building ability is the most critical skill required for industrial development. This skill means the ability to multiply oneself by effectively delegating responsibility to others. 6. Gap filling function- the most significant feature of entrepreneurship is gap filling. It is the job of entrepreneur to fill the gap or to makeup the deficiencies which always exist in the knowledge above the production function. An entrepreneur has to marshall all the input to realize the final product. 7. Status withdrawal- according to hagen creative innovation or change is the fundamental feature of economic growth. An entrepreneur is a creative problem solver interest in things in practical and technological realm. Hagen visualized an innovative personality in contrast to such authorization personality. CHARACTERISTICS OF ENTRPRENEUR MENTAL ABILITY CLEAR OBJECTIVE BUSINESS SECRECY HUMAN RELATION ABILITY COMMUNICATION ABILITY TECHNICAL KNOWLEDGE

FUNCTIONS OF ENTREPRENEUR Idea generation- it can be possible through the vision, observation, experience, education, training and exposure of the entrepreneur. Ideas can also be generated through environmental scanning and market survey. It is the function of the entrepreneur to generate as many ideas as he can for the purpose of selecting the best business opportunities which can subsequently be taken up by him as commercially viable business venture. Determination of objectives- entrepreneur should be very much clear about: 1. Nature of business, 2. Type of business. This implies whether the enterprise belongs to the category of a manufacturing concern or a service oriented unit or a trading business. So that the entrepreneur can very well carry in a venture in accordance to an objective determined by him. Raising of funds- all the activities of a business depend upon the finance and its proper management. It is the responsibility of the entrepreneur to raise funds internally or externally. In this matter he should be aware of the different government sponsored schemes such as PMRY(pradhan mantra rozgar yojna), SGSY(swarn jayanti gram swarizgar yojna), REGP(rural

employment generation program etc, by which he can get government assistance in the form of fixed and working capital for his business. Procurement of raw material- entrepreneur has to indentify the cheap and regular sources of supply of raw material which will help him to reduce the cost of production and face the competition boldly. Procurement of machinery- while procuring the machineries, he should specify the following details- 1. Details of technology 2. Installed capacity of the machine. 3. Name of manufacturer and supplier. 4. Whether the machines are indigenously made or foreign made. 5. After sales service facility. 6. Warranty period of machinery. Market research- systematic collection of data regarding the product, which the entrepreneur wants to manufacture. Entrepreneur has to undertake market research persistently in order to know the details of the intending product, demand, supply, price of product, size of customer etc, while starting an enterprise. Determination of form of enterprise- entrepreneur has to decide the form of investment based upon the nature of product volume of investment, nature of activity, types of product, quality of product, quality of human resources etc. the cheap form of ownership organization are- 1. Sole proprietor, 2. Partnership, 3. Joint stock company, 4. Cooperative society. Recruitment of man power- entrepreneur has to perform the following activities while undertaking this function are- 1. Estimating manpower need of organization, 2. Lying down of selection procedure, 3. During scheme of compensation, 4. Lying down the rules of training and development. Implementation of project- entrepreneur has to work on the implementation schedule or the action plan of project. The identified project is to be implemented in a time bound manner. All the activities from conception to commissioning to avoid cost and time over run as well as competition.

DIFFERENCE BETWEEEN MANAGER AND ENTRPRENEUR BASIS-MANAGER/ENTREPRENEUR 1. Primary motive- wants promotion and traditional, corporate rewards, power motivated/wants freedom, goal oriented, self reliance and self-motivated. 2. Action- delegate action. Supervising and reporting take most of energy/gets hands dirty. May upset employees by suddenly doing their work. 3. Skills- professional training. Often business school trained. People management and political skills. /knows business intimately. More business acumen than managerial or political skills, 4. Courage and destiny- sees others in charge of his or her destiny. Can be forceful and ambitious, but may be fearful of others ability in case of optimism. /self confident, optimistic, courageous etc. 5. Attention- primarily on events inside corporation. / primarily on technology and market place. 6. Risk- carefully/like moderate risk. Invest heavily but expects to succeed.

7. Market research- market studies done to discover needs and guide product conceptualization. / creates products that often cant be tested with market research, potential customers dont yet understand them. Talks to customers and forms own opinions. 8. Status- cares about status symbols. / happy sitting on average crate if job is getting done. 9. Failure and mistakes- strives to avoid mistakes and surprises. / deals with mistakes and failures as learning experiences. 10. Decisions- agrees with those in power. Delays decision until he gets a feel of what bosses want. /follows private vision. Decisive and action oriented. 11. Who they serve- please others. /pleases self and customers. 12. Attitude toward system- sees system as nurturing and protective, seeks position within it. /may rapidly advance in a system, when frustrate reject the system and form his or her own. SKILLS OF ENTREPRENEUR 1. 2. 3. INTERPERSONAL SKILLSLeadership and motivation skills. Communication skills. Listening skills. Personal relations skills. (entrepreneur should be emotionally intelligent) Negotiation skills. (should not only negotiate on keen price but should solve conflict) Ethics (should deal with people on basis of respect etc)(shouldnt be ungenerous) CREATIVE SKILLSCreative thinking skills Problem solving skills (how good are you at sound solution to the problem) CATWOE _Client Actor Transformation World view Owner Environment PRACTICAL SKILLSGoal setting (set a goal, create a plan, achieve a goal) Planning and organizing(should be talented to organize) Decision making(how good are you at making decisions, decision should be based on relevant information)

CLASSIFICATION OF ENTREPRENEUR 1. According to the type of business business entrepreneur- a business entrepreneur supplies risk capital as a risk taker and monitors and controls the business activities. Trading entrepreneur- who undertake trading activities. Engage in both domestic and overseas. Creates demand among the buyers and identify the potential market. Industrial entrepreneur- (manufacturers) identify customer needs and tailor activities to meet those needs. Product oriented. Start business in industrial unit to create something new. Agricultural entrepreneur- who undertake agricultural activities. Crops, fertilizers and other agricultural inputs. Try to increase agricultural productivity.

2. Social entrepreneur- find the part of society that is stock and put efforts to unstuck them. Creating orphanages. They work rare men and women who possess the vision, creativity and extra ordinar determination of the business entrepreneur but who devote these qualities to introducing new solution to societal problems. 3. According to the use of technology Technical entrepreneur- the entrepreneur of craftmen type. Have technical knowledge and they have their own design. Concentrates on manufacturing rather than marketing. Has his own skill in developing things. Non technical entrepreneur- not concerned with technical knowledge of their product. Interested in marketing and promotion of the product. Professional entrepreneur- interested in establishing a business but not interestd in managing/operating once business is established. 4. According to motivation Pure entrepreneur- motivated by economic and psychological reward. Profit motive and growth. Induced entrepreneur- it induces to take entrepreneurial task by government offerings. Gets motivated by government offerings. Motivated entrepreneur- motivated by desire of self-fulfillment, by marketing of a product, profit as reward. Spontaneous entrepreneur- start their business out of their natural talent. Produces something unnatural. Has confidence and boldness in his abilities. 5. According to growth Growth entrepreneur- takes a high growth industry. Chooses a business with high growth aspects. Super growth entrepreneur- who have shown enormous growth of performance. 6. According to stages of development 1st generation entrepreneur- starts an industrial unit by means of innovation. Modern entrepreneur- they undertake those venture which go along well changing demand in the market. Classical entrepreneur- they are stereotype. DIFFERENT THEORIES OF ENTREPRENUER ECONOMIST VIEW:- in economic analysis, entrepreneurial functions are supposed to be directed towards the materialistic objective of maximization though its foundations maybe of a high order such as spiritual, patriotic, social psychological or ethnic. J.S. mill list superintendents, control and direction as entrepreneurial functions. 1. Superintendents- to assemble the means, turn out maximum at minimum cost and to supervise the work. 2. Control- the flow of goods, use of finances, utilization of machinery and the activities of the subordinates.

3. Direction- he is a goal oriented, has to keep the organization constantly on the path of his objective. SOCIOLOGIST VIEW- they consider the entrepreneur as a role performer corresponding to the role expected by society. According to Peter Marris, to assemble or reassemble from what is available, very concurrent kind of imagination to see what others have mixed, sensitivity to business and social environment, get an industrial development and entrepreneurial courage are the factors that make an entrepreneur. According to Flavia Derossi, coordination at every stage-inception, maintenance and expansions is the function of an entrepreneur. She feels an entrepreneur needs two qualities. 1. Optimistic outlook, that there is a possibility of change 2. In a share as in the dynamic industry, new problems are ceased upon as opportunities for testing once own capabilities. PSYCHOLOGIST VIEW- among psychologist, frank young describes an entrepreneur as a change agent. K. L. Sharma maintains that entrepreneurs are men who exhibit qualities of leadership in solving persistent professional problems, but those persons likewise demonstrate eagerness to case unusual opportunities. Joseph Schumpeter states, the entrepreneur is mainly and motivated and driven by 3 things. 1. The dream and will to found a private kingdom. 2. The will to conquer 3. The joy of creating. According to David McLand, entrepreneurship has to do with individuals so called need of achievement. He identified that were:Desire to accept responsibility for solving problems, setting and reaching goals. Willingness to accept moderate risk. Desire to know the outcome of their decision.

ENTEPRENEURSHIP ENVIRONMENT POLITICAL ENVIRONMENT:- government actions which affects the operations of a company or business. These actions may be local, regional, national or international level. Entrepreneurs pay close attention to the political environment to gauge how government actions will affect their company. ECONOMIC ENVIRONMENT:- the totality of economic factors such as employment, income, inflation, interest rates, productivity and wealth, that influence the buying behavior of consumers and institutions. SOCIAL ENVIRONEMENT:-

CREATIVITY AND INNOVATION CREATIVITY- use of ideas followed by creation. Act of turning imaginative ideas into reality.

INNOVATION- process of renewing, changing and creating more effective product. This could mean implementing new ideas, creating dynamic products or improving your existing services. It can be a catalyst for the growth and success of the business.

CREATIVITY PROCESS STEP 1- INSPIRATION This is a research or idea generation phase. The process is characterized by spontaneity, experimentation, intuition and risk-taking. If you cant think of anything, you are having difficulty with this inspiration phase because you are too self critical and expect good ideas to come quickly. MINDSET- deeply engrossed, fearless, free. This is not a phase in which you have to be negative or worried about firm, practicality, rhyme or quality. You should be rejecting atleast 90% of initial ideas. Let yourself off the leash. STEP 2- CLARIFICATION The aim here is to clarify the purpose or objective of the work. It is easy to lose your sense of direction while dealing with detailed difficulties in creative work. So you need occasionally to disengage from these obstacles and ask what exactly am I trying to do. If you get stuck in the middle of a project than rather than dreaming a stream of alternatives you neo clarify where exactly you want to go. MINDSET- strategic or unhurried. STEP 3- EVALUATION In which you look back over your work in progress. In this phase, you examine your work for strengths and weaknesses. Then you need to consider how the work could be improved by removing weaknesses but also by capitalizing its strength. Many people dislike this phase at first. However, highly creative people are nearly always inveterate revisers. MINDSET- critical, positive, willing to learn. STEP 4- DISTILLATION In which you decide which ideas to work on. Ideas from inspiration phase are shifted here through and evaluated usually in the light of the findings of a clarification phase. The best ideas are chosen for further development or are combined into even better ideas. This is a self-critical phase. It requires cool analysis and judgment rather than slap-happy spontaneity. However, it should not be so critical as to inhibit productivity entirely. MINDSET- positive, strategic and intrepid. STEP 5- INCUBATION

If you are able to stop work on a project for a few days, perhaps to work on other things, this will give your subconscious time to work on any problems encountered; it will also distance you somewhat from your ideas so that you are better able to evaluate them. MINDSET- unhurried, trusting and forgetful. STEP 6- PERSPIRATION This is where the real work is done. You are involved in determined and persistent effort towards your goal, this will usually involve further inspiration, distillation and clarification phases. Perspiration involves a number of drafts, separated with clarification and evaluation phases. Uncreative people often accept the first draft as completion. Very creative people often go over and over a piece until it is to their liking. MINDSET- uncritical, enthusiastic or responsive. ENTREPRENEUR AND INNOVATION INVENTION- the creation of something new- results in new knowledge INNOVATION- the transformation of an idea or resources into useful application- results in new products, services or processes INVENTION THE CREATION OF SOMETHING NEW RESULTS IN NEW KNOWLEDGE

INNOVATION

THE TRANSFORMATION OF AN IDEA OR RESOURCES INTO USEFUL APPLICATION

RESULTS IN NEW PRODUCT, SERVICES OR PROCESSES

TRANSLATION OF CREATIVE IDEA INTO USEFUL APPLICATION ANALYTICAL PLANNING ORGANISING RESOURCES COMMERCIAL APPLICATION To provide value to customers rewards for employees revenues for investors satisfaction for founders.

IMPLEMENTATION

To identify product design, marketing strategy & financial needs.

To obtain materials technology, HR capital

To accomplish organization product design manufacture services.

USING LEFT BRAIN SKILLS TO HARVEST RIGHT BRAIN IDEAS. BASIS LEFT HEMISPHERE RIGHT HEMISPHERE (unconscious) unaware and unfocused (non-rational) special imagining without direction. (intuitive) total experiences and emotions allowed to influence ones idea. (synthesizing) illogical reasoning and fantasizing to create analogies.

CONSCIOUSNESS Aware and focused on specific issues. (conscious) RATIONALITY (rational) conscious modeling of issues, linearity. ANLYTICALITY (analytical) use of knowledge in discrete. LOGIC (logical) deductive reasoning to establish relationship.

TECHNOLOGICAL INNOVATION CREATIVE SOURCE CHAMPION SPONSOR

INVENTOR OR ORIGINATOR WHO CREATES SOMETHING NEW THROUGH PERSONAL VISION AND EFFORT.

ENTREPRENEUR OR MANAGER WHO PURSUES THE IDEA, PROVIDING LEADERSHIP FOR APPLICATIONS.

PERSON OR ORGANISATION THAT BACKS INNOVATION WITH FINANCES, ADVICE AND CONTRACTS.

BUSINESS PLAN PRILIMINARY SECTION - Cover page - Table of content - Executive summary *COVER PAGE - include the company name, address, telephone, fax number and email address. - name and position of the contact person (firms top executive) - the date of business was established and the date of this particular version of the business plan. - the copy number of the plan (security, limited circulations) - the company logo *TABLE OF CONTENT-

Here the table should follow the format of elements of business plan. *EXECUTIVE SUMMARY ^- COMPANY SUMMARY- state what your primary product of service is, but not complicated matters by listening product extensions on auxiliary services. - stress the uniqueness of your product or services. - should not be more than 150 words or half page. ^- MANAGEMENT- list the top 2-3 people and emphasis their industry experience. ^- PRODUCT/SERVICE AND COMPETITION- target segment and competitors. ^- FINANCIAL HISTORY- in presenting the firms financial history. Show only those major categories i.e, revenues, net income asstes, liabilities and net worth. ^- USE OF PROCEEDS- the financial section in the main body of the business plan should be specific about the use of proceeds. ^- EXIT- this section of executive summary indicates how and when the investor is most likely to accomplish this MAJOR SECTION 1. BACKGROUND AND PURPOSE HISTORY- briefly describes the history of your venture product and services. CURRENT SITUATION- briefly describes what your product is, to whom it would be marketed and technology necessary to make and deliver the product. RESOURCE BASED CONCEPT- briefly describe the key resources that contribute to the firms success. 2. OBJECTIVE LONGTERM- more than 1 year to achieve desired outcome. SHORT TERM less than 1 year 3. MARKET ANALYSIS OVERALL MARKET- describes the overall market for the firms industry, its current condition and its projection for sales, profit, rate of growth and other trends. SPECIFIC MARKET- narrow the focus to be the specific target market segment or in which your firm operate. COMPETITIVE FACTORS-analyse the power of buyers, suppliers, substitute products and services, the height of entry barriers and nature of current rivalry, MICRO ENVIRONMENTAL INFLUENCE- SLEPT 4. DEVELOPMENT PRODUCTION PRODUCTION PROCESS- outline the stages in the development and production process, these resources are human organizational financial reputational and relationship resources.

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QUALITY ASSURANCE MARKETING OVERALL CONCEPT AND ORIENTATION- this indicates what benefits and positive outcomes will the customer derive from interaction with the firm. MARKETING STRATEGY- briefly restate a description of primary product or service along with that of the firms major competitors. SALES FORECAST- in this section you provide figures to indicate how many buyers are their for the firms products, where they are located and how purchasing decisions are made. FINANCIAL PLANS FINANCIAL STATEMENT- if the firm has an operating history, summaries its past and present performance, past by ratios that highlights its profitability, liquidity, leverage and activity. FINANCIAL RESOURCES- prepare a detailed list of all the physical assets the firm needs to purchase or base and a statement of organizational cost such as legal architecture and engineering. FINANCIAL STRATEGY- the firms financial strategy consist of 2 components. The first comprises sources and uses of fund. The second comprises of internal control and monitoring system. what safeguards are proposed to generate security of fund. ORGANISATION AND MANAGEMENT KEY PERSONNEL RESOURCES- this section describes the firms people, entrepreneurs in top management team as well as the firms technical reputational and human resources. Provide an organizational chart with the names and titles of the key executives, provide brief synopsis of these individuals previous experience education and related qualification. HRM STRATEGY- state the firms basic velocity, concerning human resources and management. Does it favors closed supervision or general supervision. Describe its strategy for employee compensation, profit sharing and employee ownership. What are its strategies for employee and management development and training for continuing education and for hiring and promoting from within? What factors dictate criteria for promotion? How will performance be assessed. OWNERSHIP In this section the founders describe the legal form of the business. 1. Form of business- legal form of the business i.e, sole proprietorship, partnership, regular corporation and briefly explain why this is best form of your firm. 2. Equity position- prepare and exhibit to show the amount that you and the other founders and executives of the company have invested in the business or will be investing in the near future. 3. Deal structure- briefly describe which kind of financing is required to start up the business or to fund the development and expansion of present business activities. CRITICAL RISK AND CONTINGENCIES This section typically includes following categories of information and the potential impact of each on a new winter. 1. Failure to produce the products and services promised. 2. Failure to meet production deadlines or sales forecast.

3. Problems with the suppliers and distributors 4. The problem of unproven and inexperienced management. 5. Difficulties in raising additional financing. 6. Other issues specific to firm in question. CONCLUDING SECTION There are still loose ends and details to report on in the concluding section. 1. SUMMARY- the most important elements to include are the firms overall strategic direction, the reason for believing the firm will be a success, a brief description of how the firm will be able to exploit its resources to advantage, the firms sales and profit projections, its capital requirements and the percentage ownership for the founders and for investors. 2. SUMMARY- to consolidate the timing of events you should prepare a schedule in chart form of all of the important milestones that the firm expects to reach in a near and inter mediate term. APPENDIX 1. A photograph or a drawing of your product including title and labels if necessary. 2. A photograph or a drawing of your intended location and physical layout if necessary. 3. Sales and profitability forecast in short form. 4. Market surveys and documentation of size and nature of market. 5. Sample advertisements, brochures and tele-marketing protocols. 6. Sample press releases. FINANCIAL STEPS WILL INCLUDE FOLLOWING 1. Determining the capital structure which should be based on the long term plan of business. 2. Forecasting the most probable course of events which may include: a. Quantum of finance b. Pattern of financing c. Policies to be persuade for implementing proposed pattern of financing. d. Time for floating various corporate securities. During the course of financial planning the financial forecast has to be made estimating the under mentioned elements: i. fixed capital requirement ii. working capital requirement iii. credit policy to be followed iv. debt equity ratio and other contingencies. 3. Long term and short term credit loan Sources of long term investment - Owners capital - Term loans from financial institutions - Deposits or loans given by owner (partner/directors) - Hire purchase or leasing facility from a NBFC. (national banking financial company)

Machinery purchase under the industrial development, bank of indias rediscounting scheme. Seed capital (money from founders personal venture capital, margin money, subsidy, soft loans from govt./financial institutions. (loans with low interest)

Sources of short term finance Bank borrowing for working capital. Deposits/borrowing from friends/relatives others. Sundry creditors. Deposit received from customers.

ECONOMIC AND NON ECONOMIC BARRIERS TO ENTREPRENEURSHIP ECONOMIC BARRIERS CAPITAL LABOUR RAW MATERIAL NON ECONOMIC BARRIER SOCIAL transition building Importance given to logics

PERSONAL- lack of sustained motivation Inability to dream and use sub conscious Impatient in solving problems Lack of clear perception

Ques- a unit manufactures tables and employees 5 workers and 1 foremen on a monthly salary of rs.3500 and rs.6000 respectively. All workers are required to work for 40 hours a week and the unit remains closed for 1 week in a year and the employees get a paid leave for 4 weeks. The unit produces two table per year. MATERIAL Plywood Steel pipe Paint INDIRECT COST;QUANTITY 10sq.meter 6 meter 500gms COST (RS.) 25 per sq. mtr 30 per mtr 100per kg

From the last year;s account the total overhead of the factory are as given below: Total cost- 1,99,000/yr This year the cost are likely to increase by 20%. Solution- plywood- 10*25=250 Steel pipe- 6*30=180 Paint- (500/1000)*100=50 Total = 250+180+50=480/unit 1. 2. 3. 4. 5. 6. 7. 8. 9. No. of workers working in a year= 47 No. of man hours per annum= 40*47*5=9400 Wage per man hour= 28200/9400=30 Time for producing 1 table= 9400/1000= 9.4 hours Direct labour cost per table= 9.4*30= 282 Total direct cost per table= 480+282=762 Annual wage bill= 20% of 199000+199000= 238800 Total indirect cost per table= 238800/1000=238.8 Total cost= 762+238.8=1000.8

COST VOLUME PROFIT ANALYSIS CONTRIBUTION= 1. SELLING PRICE - VARIABLE COST 3. FIXED COST- PROFIT PROFIT= CONTRIBUTION FIXED COST PROFIT VOLUME RATIO= CONTRIBUTION/SALES BEP OF OUTPUT= FIXED COST/CONTRIBUTION PER UNIT BEP OF SALES= (FIXED COST * TOTAL SALES)/CONTRIBUTION COMPOSITE BEP= TOTAL FIXED COST/COMPOSITE PROFIT VOLUME RATIO = (TOTAL FIXED COST * SALES)/ CONTRIBUTION COMPOSITE PROFIT VOLUME RATIO= (TOTAL CONTRIBUTION/ SALES) *100 Question- the budget of AB ltd. Includes the following data for the forthcoming financial year. a) Fixed expenses= 300000

b) Contribution per unit= product x- 6 Product y- 2.50 Product z- 4 c) sales forecast- product x- 24000units @rs12.50 product y-100000 units @rs 7 product z- 5000 units @rs 10 answer- 1. contribution= x- 24000*6= 144000 y- 1,00,000*2.50=250000 z- 5000*4=20000 total= 414000 sales- x= 24000*12.5= 300000 y= 100000*7= 700000 z= 5000*10= 50000 total= 150000 composite profit volume ratio=( contribution/sales)*100 =(414000/150000)*100= 39.6 Composite BEP = total fixed cost/ total profit volume ratio =(300000/39.6)*100 = 757575.7575758 Sales ratio (in rs.)= X:Y:Z=3:7:5 3a+7a+5a=757575.7575 a= 50505.50505 X=3a= 3* 50505.50505= 151515 Y=7a= 7 *50505.50505= 353535 Z= 5a= 5 * 50505.50505= 252525 sales ratio (in units) x= 151515/12.5 = 12121.2

y= 353535/7= 50505 z=252525/10= 25252.5252