A company produces a single product and and sell it at 200 each.the variable cost of the product is 120 per unit and the fixed cost for the year is 96000.
claculate:
(1) P.V ratio
(2) Sales at break-even point.
(3) sales unit required to earn a target net profit of 120000
(4) sales unit required to earn a target net profit of 100000 after income tax,assuming income tax rate to be 50%.
(5) profit at sales of700000.
p/v ratio = contribution/sales= 80/200= 40%
sales at breakeven= fixed cost/ p.v= 96000/0.4= 240000
sales for profit of 120000= (96000+120000)/0.4 = 540000
4. for net profit of 100000, (after tax)..before tax profit has to be 200000...
so sales- (96000+ 200000)/0.4= 740000
5. units = 700000/200= 3500
contribution = 3500*80= 280000
less fixed cost 96000
profit - 184000
agree with sunshine
Very Well Explained by Sneha.agree.
| Originally posted by : SAN... | ||
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Very Well Explained by Sneha.agree. |
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