Management accounting
The estimated fixed cost would be Rs.75,000 and the variable cost per unit comes to Rs.5.
i) it has been asked to find out the break-even point for each type of pen
and also to fin out the number of pens to be sold by the manufacturer in order to make a profit of Rs.25,000
super 20 15
deluxe 15 11.25
basic 10 7.50
Super 10
deluxe 6.25
basic 2.5
Breakevan point = Fixed Cost / Contribution per unit
=> 75,000 / 10
i.e. 7,500 super pens
Breakevan point = Fixed Cost / Contribution per unit
=> 75,000 / 6.25
i.e. 12,000 deluxe pens
Breakevan point = Fixed Cost / Contribution per unit
=> 75,000 / 2.5
i.e. 30,000 basic pens
SAles = (Fixed Cost + Desired profit)/ Contribution per unit
For the Super Pens, it will be
(75,000+25,000)/10
(1,00,000)/10
10,000 super pens
16,000 deluxe pens and 40,000 basic pens to eqarn the desired profit of Rs 25,000 in each class of pen
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