A company sells 2,75,000 units of its product at Rs. 47.50 per unit. Variable costs are Rs. 27.50 per unit (manufacturing costs of Rs. 10 and selling cost of Rs. 2.50 per unit). Fixed costs are incurred uniformly throughout the year and amount to Rs. 40,00,000 (including depreciation of Rs. 10,00,000). There is no beginning or ending inventories. Estimate the number of units that must be sold to earn an income (EBIT) of Rs. 3,50,000 and the sales level achieve an after-tax income (PAT) of Rs.3,50,000 when a PV ratio of 42%. Assume a 40% corporate income tax rate. 

Required

Also, draw a break-even chart depicting important parameters.

Answer rating: 100% (QA)

Sale price per unit Rs 4750 Variable cost per unit Rs 27... View the full answer