Answer to Question #258337 in Finance for Sayl

Question

Following particulars has been shared for you. If fixed cost is Rs500000, selling price is Rs60 and Variable cost is Rs20

a. Calculate and describe -Breakeven point (5 Marks)

b. What could be the sales number to earn a profit of Rs 50000, at a Fixed Cost Rs 200000, Variable Cost Rs30 per unit, Selling Price Rs 60 per unit (5 Marks)

Answer 1

a.Break- even point$=$ Fixed Costs$÷($ Sales per unit$-$ Variable cost per unit$)$

$=Rs500000÷(60-20)$

$= 12,500$ units

b. $TR-TC=TP$

$60Q-200000-30Q=50000$

$30Q=$ $250,000$

$Q=8,333.33$ units