Question

The following information relates to a company, which produces a single product.
Direct labour per unit Rs 22
Direct materials per unit Rs 12
Variable overheads per unit Rs 6
Fixed costs Rs 4,00,000
Selling price per unit Rs 60
Use the figures above to show the minimum number of units that must be sold for the company to break-even.

Answer 1

Answer:

Unit of sales can be defined as the measure of what products are sold.

(ii) Excess of Unit Price over Unit Cost is known as the Unit Gross Profit or Unit Gross Margin. This represents the business’s profit from selling a product or providing service before deducting fixed expenses such as salaries, rent, and other expenses.

Gross Profit = Unit Price – Unit Cost.

(iii) Credit Transaction/Selling on credit.