Question

Determine Fixed cost, PV Ratio, BEP & Profit when sales=10, 00,000.
From the following data.
Sales = 500000
Direct Material = 150000
Direct labor = 120000
Direct Expenses = 60000
Profit = 70000

Answer 1

Explanation:

Basic Marginal Cost  A company has an opening stock of 6,000 units of output. The production planned for the current period is 24,000 units and expected sales for the current period amount to 28,000 units. The selling price per unit of output is Rs.10. Variable cost per unit is expected to be Rs. 6 per unit while it was only Rs. 5 per unit during the previous period. What is the Break Even volume for the current period if the total fixed costs for the current period is Rs. 86,000? Assume that the first In first out system is followed. Assume that the Last in first out system is followed. SOLUTION:- Statement of Break Even Point (FIFO) Nature Quantity contribution per unit Total contribution Opening stock 6000 5/- 30,000 Current production 14,000 4/- 56.000 (B.f.) ∴ Break event point 20,000 unit fixed cost 86.000 Hence, Under FIFO System is covered by selling of 20000 units. There fore. The sale of 20.000 units is the break even point. Statement of break event point (LIFO) Nature Quantity Contribution per unit Total contribution Current 21,500 4/- 4/- Opening stock - 5/- - 21.500 86.000 ∴ Break Even Point = 21,500 units -------------------------------------------------------------------------------------------------

Answer 2

Explanation:

Direct labor = 120000

Direct Expenses = 60000

Profit = 70000