A company manufactures a product, currently utilizing 80 % capacity with a turnover of Rs. 8,...

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A company manufactures a product, currently utilizing 80 % capacity with a turnover of Rs. 8, 00,000 at Rs.25 per unit. The cost data are as under: i. Material cost Rs. 7.50 per unit, Labour cost Rs. 6.25 per unit. ii. iii. iv. Semi variable cost (including variable cost of Rs. 3.75 per unit) Rs. 1,80,000 Fixed cost Rs. 90,000 up to 80 % level of output, beyond this an additional Rs. 20,000 will be incurred. Calculate: a) Break-Even point b) Number of units to be sold to earn a net income of 8 % of sales c) Activity level needed to earn a profit of Rs. 94,000 d) What should be the selling price per unit, if break-even point is to be brought down to 15,000 units? A company manufactures a product, currently utilizing 80 % capacity with a turnover of Rs. 8, 00,000 at Rs.25 per unit. The cost data are as under: i. Material cost Rs. 7.50 per unit, Labour cost Rs. 6.25 per unit. ii. iii. iv. Semi variable cost (including variable cost of Rs. 3.75 per unit) Rs. 1,80,000 Fixed cost Rs. 90,000 up to 80 % level of output, beyond this an additional Rs. 20,000 will be incurred. Calculate: a) Break-Even point b) Number of units to be sold to earn a net income of 8 % of sales c) Activity level needed to earn a profit of Rs. 94,000 d) What should be the selling price per unit, if break-even point is to be brought down to 15,000 units?

Answer rating: 100% (QA)

a To calculate the breakeven point we need to find the level of sales at which total revenue equals ... View the full answer