Question: Sales (200,000 units @ 5 Each) 1,000,000 Variable cost 600,000 Contribution margin 400,000 Less Fixed cost 200,000 Profit before tax 200,000 Less tax 80,000 Profit
Sales (200,000 units @ 5 Each) 1,000,000 Variable cost 600,000 Contribution margin 400,000 Less Fixed cost 200,000 Profit before tax 200,000 Less tax 80,000 Profit after tax 120,000 Required The company management feels that it should earn at least Rs.50, 000 pre taxes per annum on the new investment what sales volume is required to enable the company to maintain existing profit
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