Q.

6 From the following data calculates the:-

(A) Break-even point expressed in terms of sale amount/revenue.

(B) Number of units that must be sold to earn a profit of Rs. 60, 000 per year

Ans. (A)

¿ cost
Break-even point (in units) =
Sales−Variable cost

¿ cost( FC)
Break-even point (in amount) = ×Sales
Sales−Variable cost ( S−V )

Given,

Sales price (per unit) =RS. 20

Total Variable cost (per unit) = Rs. 11+3 = Rs. 14

Total Fixed (per year) = Rs. 5, 40,000+2, 52,000 = Rs. 7, 92,000

7,92,000
B.E.P. (in unit) =
(20−14)
,
7,92,000
= 6 ,

= 132000 (per unit)

7,92,000
B.E.P. (in Rs.) = × 20,
(20−14)

7,92,000
= × 20,
6

= Rs. 26, 40,000.

(B)

F .C .+ Profit(Traget )
Sales (in unit) =
(S−V )

7,92,000+ 60,000
Sales (in unit) =
(20−14)
,
8,52,000
= 6 ,

= 1, 42,000 (units)