Question
Information regarding Sanjeev Ltd. is as follows:
| Sales | 6,00,000 |
| Less : Variable costs | 4,50,000 |
| Contribution | 1,50,000 |
| Less : Fixed costs | 90,000 |
| Profit | 60,000 |
You are required to calculate:
(a) Break-even point
(b) P/V Ratio
(c) Profit on sales of` 9,00,000
(d) Sales required to each a profit of 90,000
(e) Margin of safety
Answer :
Word Count : 387
Let's solve each of the required items step-by-step based on the provided data. ### Given Data: - Sales = 6,00,000 - Variable costs = 4,50,000 - Contribution = 1,50,000 (Sales - Variable Costs) - Fixed costs = 90,000 - Profit = 60,000 (Contribution - Fixed Costs) ### (a) Break-even Point (BEP): The break-even point is the level of sales at which the company has no profit or loss. It can be calculated using the formula: \[ \text{BEP} = \frac{\text{Fixed Costs}}{\text{Contribution per unit}} \] First, calculate the contribution per unit: \[ \text{Contribution per unit} = \frac{\text{Contribution}}{\text{Sales}} = ____ __________ ________ ____ ________ __________ _______ _____ ______.
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Let's solve each of the required items step-by-step based on the provided data. ### Given Data: - Sales = 6,00,000 - Variable costs = 4,50,000 - Contribution = 1,50,000 (Sales - Variable Costs) - Fixed costs = 90,000 - Profit = 60,000 (Contribution - Fixed Costs) ### (a) Break-even Point (BEP): The break-even point is the level of sales at which the company has no profit or loss. It can be calculated using the formula: \[ \text{BEP} = \frac{\text{Fixed Costs}}{\text{Contribution per unit}} \] First, calculate the contribution per unit: \[ \text{Contribution per unit} = \frac{\text{Contribution}}{\text{Sales}} = ____ __________ ________ ____ ________ __________ _______ _____ ______.
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