Forsales Ltd. produces and sells 3 products, Abba, Dabba and Jabba. The total sales from these three products for the coming year are expected to be Rs. 100 lakhs and the ratio of sales across the products is expected to be 3:5:2.

The variable costs are expected to be 60% of sales and in the ratio of 2:7:3. The resultant contribution is used to absorb fixed costs of Rs. 28 lakhs. Assuming the sales ratio to remain the same:

Find out the break even point (in rupees of sales) for each of the products.

What is the current margin of safety for each product?

If Forsales wanted to have an operating income of 20 lakhs, find out the total sales and sales per product required for this level of operating income.

Answer rating: 100% (QA)

1 BreakEven Point for Each Product Given Total Sales Rs 100 lakhs Sales Ratio AbbaDabbaJabba 352 Var... View the full answer