can someone plz help me with this problem....plz provide me the correct solution
A company produces a single product and sells it at Rs.200 each. The variable cost of the product is Rs.120 per unit and the fixed cost for the year is Rs.96,000.
Calculate
1) P/V ratio
2) Sales at break even point
3) Sales unit required to earn a target net profit of Rs.1,20,000
4) Sales units required to earn a target net profit of Rs.1,00,000 after income tax, assuming income tax rate to be 50%.
5) Profit at sales of Rs.7,00,000.
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Cost accounting help!!
Replies (2)
Sale Price=200
V.Cost=120
so Contribution is80(200-120)
and
(!) P/V Ration = Contribuion / sale X100 =80/200*100=40%
(2) BEP(In Units)= Fixed Cost / contribution per unit = 96000/80=1200 units
In= 1200unitsXRs. 200= 2,40,000
(3) SAle for a desired profit of1,20,000 would be
(Fixed cost+D.Profit)/P/V ratio = (96,000+1,20,000)/40% , =5,40,000
(4) Profit at a sale of7,00,000 would by
7,00,000*.40-96000 = 1,84,000 ( Sale Xp/v ration-FC)
(5) net profit after TAX is 1,00,000 so before tax we need to earn Rs. 2,00,000
So logic is same , we need a desired profit Rs. 2,00,000
It would be (96000+200000)/.40=Rs. 7,40,000
Hope your problem solved
Sale Price=200
V.Cost=120
so Contribution is80(200-120)
and
(!) P/V Ration = Contribuion / sale X100
=80/200*100=40%
(2) BEP(In Units)=
Fixed Cost / contribution per unit = 96000/80=1200 units
In= 1200unitsXRs. 200= 2,40,000
(3) SAle for a desired profit of1,20,000 would be
(Fixed cost+D.Profit)/P/V ratio = (96,000+1,20,000)/40% , =5,40,000
(4) Profit at a sale of7,00,000 would by
7,00,000*.40-96000 = 1,84,000 ( Sale Xp/v ration-FC)
(5) net profit after TAX is 1,00,000 so before tax we need to earn Rs. 2,00,000
we need a desired profit Rs. 2,00,000
It would be (96000+200000)/.40=Rs. 7,40,000
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