x

Choose Country Code

x

Direction

x

Ask a Question

  • Ask a Question
  • Scan a Question
  • Post MCQ
  • Note: File extension must be of jpg, jpeg, png, bmp format and file size must not exceed 5 MB
x

Ask a Question

x

x
x
x
Hire a Tutor

Answers and Solutions

What's Your Question?
Answer

Answer:

Break even sales is that value of sales at which total sales exactly equals the total cost of production,that is sum total of fixed costs and variable costs and there would be neither any profit nor any loss.

Here present sales =  Rs 30,00,000

Profit                      =    Rs  1, 80,000

Hence Break even point sales =   3000000- 180000 =   Rs 28,20,000

Variable costs =  Rs 21,00,000

Therefore fixed costs = 2820000- 2100000 =  Rs 7,20,000 

Increase in the variable costs = 5%

Hence the variable cost for the next year = 2100000*1.05 = Rs 22,05,000

Hence new break even sales = Variable costs +Fixed costs =  2205000+720000= Rs 29,25,000

 

Answer

The sales are 30,00,000 and the variable cost is 2100000 then the contribution is 900000 from this profit 180000 is reduced then the fixed cost is 720000

The break even sales = Fixed cost / PV ratio or contribution sales ratiio 

Fixed cost is 720000 and contributin sales ratio = 900000/300000x100 = 30%

Break even sales = 720000/30% = 24,00,000 

If the variale cost increases by 5% then the revised variable cost will be

2100000x1.05 = 2205000

With the change in variable cost the new contribution will be 3000000-2205000 -795000

Changed PV ratio or contribution sales ratio = 795000/3000000 = 26.5%

Changed Breakeven point with the increased variable cost = Fixed cost / changed cotribution sales ratio

                                                                                        720000/26.5% = 2716981.13

 

 

Post Answer and Earn Credit Points

Get 5 credit points for each correct answer. The best one gets 25 in all.

Post Answer