(Solved by Humans)-Problem 2 From the following information of a company, calculate the breakeven point and turnover...
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Problem 2 From the following information of a company, calculate the breakeven point and turnover required to earn a profit of Rs. 36,000. Fixed Overheads Rs. 1,80,000 Selling Price Rs. 20 Variable Cost Per Unit Rs. 2 If the company is earning a profit of Rs. 36,000, express the margin of safety available to it. Solution 1. Breakeven Point Contribution Per Unit (s – v) Rs. Selling Price Per Unit 20 Variable Cost Per Unit 2 Contribution 18 Fixed Overheads = 1,80,000 Breakeven Point = Fixed Overheads Contribution Per Unit = 1,80,000 18 = 10,000 Units or Sales of Rs. 2,00,000 2. Turnover required to earn a Profit of Rs. 36,000 = Fixed Overheads Contribution Per Unit = Rs. 1,80,000 + Rs. 36,000 18 = 2,16,000 18 = 12,000 units or Sales of Rs. 2,40,000 3. Margin of Safety Units Rs. Actual Sales 12,000 2,40,000 Sales at Breakeven Point 10,000 2,00,000 Margin of Safety 2,000 40,000 Margin of Safety may also be calculated as follows: Margin of Safety = Net Profit
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This question was answered on: 10 May, 2025
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