sales rs 60000,variable cost rs 30000,fixed cost rs 15000 calculate the present value ratio ,break even point and margin of safety at this level
Answers
Answer:
sorry i don't know meaning of this question
Total units to be produced to earn planned profit = 40, 000 + 40, 000 = 80, 000 units.
Explanation:
Bansi company manufactures a single product having a marginal cost of Rs. 1.50 per unit. Fixed cost is Rs. 30,000 per annum. The market is such that up to 40,000 units can be sold at a price of Rs. 3.00 per unit, but any additional sale must be made at Rs. 2.00 per unit. Company has a planned profit of Rs. 50,000. How many units must be made and sold?
Solution:
a. Contribution desired = Fixed cost + Desired Profit
= 30,000 + 50,000 = 80,000
b. Calculation of contribution by producing 40,000 units.
Contribution per unit = Selling price – Marginal cost
= 3.00 – 1.50
= 1.50
c. Contribution for producing 40,000 units.
= 1.50 x 40,000 units
= Rs.60, 000
d. Additional units to be produced and sold at Rs. 2.00 per unit after 40,000 units.
=Rs.80, 000 –Rs. 60, 000
=Rs.20, 000
e. Units to be produced for contribution of Rs. 20, 000 after change in price.
Contribution per unit = Rs. 2.00 – Rs. 1.50= Rs. 0.50
f. Additional units to be produced for contribution of Rs. 20, 000.
= (20, 000 x 100)/50 = 40, 000 units.
Total units to be produced to earn planned profit = 40, 000 + 40, 000 = 80, 000 units.