Mr. X has Rs. 2,00,000 investments in his business firm. He wants a 15% return on his money. From the
Question:
Mr. X has Rs. 2,00,000 investments in his business firm. He wants a 15% return on his money. From the analysis of recent cost figures, he finds that his variable operating cost is 60% of sales and his fixed costs are Rs. 80,000 per year. Show computations to answer the following questions:
(a). What sales volume must be obtained to break-even?
(b). What sales volume must be obtained to get 15 per cent return on investment?
(c). Mr. X estimates that even if he closed the doors of his business, he would incur Rs. 25,000 as expenses per year. At what sales would he be better off by locking his business up?
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To answer the questions we will use the information provided about Mr X s investments desired return variable operating costs fixed costs and estimate…View the full answer
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Chapter #
16- MARGINAL (VARIABLE) COSTING..
Section: Problem
Problem: 33
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Question Posted: September 07, 2023 12:49:12