Question

Given: Sales - 10,000 units @ Rs.5

p.u., Variable Cost @ Rs.3 p.u. and Fixed Cost is Rs.10,000. What is impact on Break even sales if sales volume is increased by 10 per cent?​

Answer 1

Given  :  Sales - 10,000 units @ Rs.5 p.u.,

Variable Cost @ Rs.3 p.u.  nd

Fixed Cost is Rs. 10,000.

To Find : Impact on Break even sales if Variable cost is increased by 10 per cent ​

Solution:

Current scenario

Sales - 10,000 units @ Rs.5 p.u.,

=> Revenue = 10000 * 5  = 50000 Rs

Variable Cost @ Rs.3 p.u

=> Variable Cost for  10000 units  = 10000 * 3 =  30000 Rs

Fixed Cost  = Rs 10000

Total Cost for 10000 units  = 30000 + 10000  = 40000 Rs

Profit = 50000 - 40000 = Rs 10000

For Break even Let say X units

Then  Revenue  = 5X    and total Cost  = 3X  + 10000

5X = 3X + 10000

=> X = 5000    ( 5000 is break even )

Variable cost is increased by 10 per cent

=> Variable cost per unit =  3 + (10/100)3 = 3.3  Rs

Then  Revenue  = 5X    and total Cost  = 3.3X  + 10000

5X = 3.3X + 10000

=> X = 10000/1.7  =     ( 5882.35 is break even )

= 5883

883  (17.7  % )  units more to sold to get break even  Variable cost is

increased by 10 per cent

Learn More:

Q. By considering the Particulous as mentioned:-fixed cost-1.5 Lakh ...

brainly.in/question/13282320

For the following, perform a break-even analysis showing ...

brainly.in/question/13327048