Given: Profit = Rs.12000, Fixed Cost = 24000, Margin of Safety = 30000.
Asked to findout new Break Even Point if selling price is reduced by 10%.
So, to findout BEP we need variable cost. Can someone tell me how to get it?
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How to find variable cost?
Replies (3)
what is the units sold ?
Variable cost at present level of activity :54000
now it is easy to find
Thanks gillbates.
Could also please tell me the proceedure you used to find that?
BTW, how to findout the Variable Cost from this details: Fixed Costs = Rs. 4000, BEP = Rs. 10000.
Variable Cost = 6000
Hint : At BEP, Fixed cost = Contribution
so cont. =4000
then Calculate PVR, for finding Sales
which is 40%
Sales=10000
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