A manufacturing company producing a single product sells it at Rs. 50 per unit. The unit variable cost is Rs.35 and fixed cost amounts to Rs.12 lakhs per annum. With this data you are required to calculate the following, treating each as independent of the other.

(a) P/V ratio and break-even (BE) sales.

(b) New BE sales if the variable cost increases by Rs.3 per unit without any increase in the selling price’.

(c) Increase in the sales required if if profits are to be increased by Rs. 2,40,000

(d) Percentage increased/decrease in the sales volume units to offset.

(i) An increase of Rs.3 in the variable cost per unit

(ii) A 10% increase in the selling price without affecting the existing

Answer rating: 100% (QA)

a PV ProfitVolume Ratio and BreakEven BE Sales PV Ratio Sales per unit Rs 50 Variable Cost per unit Rs 35 Contribution per unit5035 15 PV Ratio 15 50 ... View the full answer