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A company sold in two successive periods 7000 units and 9000 units and had incurred a loss of Rs.10,000 and earned Rs.10000 as profit respectively. The selling price per unit can be assumed as Rs.100. Calculate: (i) P/V Ratio (ii) The amount of fixed Cost (iii) The number of units to break-even (iv) The number of units to earn a profit of Rs. 40,000.?
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A company sold in two successive periods 7000 units and 9000 units and...
(i) Calculation of P/V Ratio:
P/V Ratio = (Contribution/Sales) × 100
Contribution = Sales – Variable Cost
Selling Price per unit = Rs.100
For the first period:
Sales = 7000 units × Rs.100 = Rs.7,00,000
Loss = Rs.10,000
Contribution = Sales – Variable Cost = Rs.7,00,000 – (7000 units × Variable Cost)
For the second period:
Sales = 9000 units × Rs.100 = Rs.9,00,000
Profit = Rs.10,000
Contribution = Sales – Variable Cost = Rs.9,00,000 – (9000 units × Variable Cost)
Equating the two contribution equations:
Rs.7,00,000 – (7000 units × Variable Cost) = Rs.9,00,000 – (9000 units × Variable Cost)
2000 units × Variable Cost = Rs.2,00,000
Variable Cost = Rs.100 per unit
Contribution = Sales – Variable Cost
For the first period:
Contribution = Rs.7,00,000 – (7000 units × Rs.100) = Rs.0
For the second period:
Contribution = Rs.9,00,000 – (9000 units × Rs.100) = Rs.0
Therefore, P/V Ratio cannot be calculated as there is no contribution earned in both the periods.
(ii) Calculation of Fixed Cost:
Total Cost = Fixed Cost + Variable Cost
For the first period:
Total Cost = Rs.10,000 + (7000 units × Rs.100) = Rs.8,10,000
Fixed Cost = Total Cost – Variable Cost = Rs.8,10,000 – (7000 units × Rs.100) = Rs.1,10,000
For the second period:
Total Cost = Rs.9,00,000 – (9000 units × Rs.100) = Rs.0
Fixed Cost = Total Cost – Variable Cost = Rs.0 – (9000 units × Rs.100) = Rs.(-9,00,000)
(iii) Calculation of Break-Even Point:
Break-Even Point (BEP) = Fixed Cost / Contribution per unit
For the first period:
BEP = Rs.1,10,000 / Rs.0 = Undefined
For the second period:
BEP = Rs.0 / Rs.0 = Undefined
As there is no contribution earned in both the periods, the Break-Even Point cannot be calculated.
(iv) Calculation of Units to Earn a Profit of Rs. 40,000:
Target Profit = Fixed Cost + Profit
For the second period:
Target Profit = Rs.(-9,00,000) + Rs.40,000 = Rs.(-8,60,000)
Units to be sold to earn a profit of Rs. 40,000 = Target Profit / Contribution per unit
Contribution per unit = Selling Price per unit – Variable Cost per unit = Rs.100 – Rs.100 = Rs.0
Units to be sold to earn a profit of Rs. 40,000 = Rs.(-8,60,000) / Rs.0 = Undefined
As there is no contribution earned in the second period, the number of units to earn a profit of Rs. 40,000
P/V Ratio = (Contribution/Sales) × 100
Contribution = Sales – Variable Cost
Selling Price per unit = Rs.100
For the first period:
Sales = 7000 units × Rs.100 = Rs.7,00,000
Loss = Rs.10,000
Contribution = Sales – Variable Cost = Rs.7,00,000 – (7000 units × Variable Cost)
For the second period:
Sales = 9000 units × Rs.100 = Rs.9,00,000
Profit = Rs.10,000
Contribution = Sales – Variable Cost = Rs.9,00,000 – (9000 units × Variable Cost)
Equating the two contribution equations:
Rs.7,00,000 – (7000 units × Variable Cost) = Rs.9,00,000 – (9000 units × Variable Cost)
2000 units × Variable Cost = Rs.2,00,000
Variable Cost = Rs.100 per unit
Contribution = Sales – Variable Cost
For the first period:
Contribution = Rs.7,00,000 – (7000 units × Rs.100) = Rs.0
For the second period:
Contribution = Rs.9,00,000 – (9000 units × Rs.100) = Rs.0
Therefore, P/V Ratio cannot be calculated as there is no contribution earned in both the periods.
(ii) Calculation of Fixed Cost:
Total Cost = Fixed Cost + Variable Cost
For the first period:
Total Cost = Rs.10,000 + (7000 units × Rs.100) = Rs.8,10,000
Fixed Cost = Total Cost – Variable Cost = Rs.8,10,000 – (7000 units × Rs.100) = Rs.1,10,000
For the second period:
Total Cost = Rs.9,00,000 – (9000 units × Rs.100) = Rs.0
Fixed Cost = Total Cost – Variable Cost = Rs.0 – (9000 units × Rs.100) = Rs.(-9,00,000)
(iii) Calculation of Break-Even Point:
Break-Even Point (BEP) = Fixed Cost / Contribution per unit
For the first period:
BEP = Rs.1,10,000 / Rs.0 = Undefined
For the second period:
BEP = Rs.0 / Rs.0 = Undefined
As there is no contribution earned in both the periods, the Break-Even Point cannot be calculated.
(iv) Calculation of Units to Earn a Profit of Rs. 40,000:
Target Profit = Fixed Cost + Profit
For the second period:
Target Profit = Rs.(-9,00,000) + Rs.40,000 = Rs.(-8,60,000)
Units to be sold to earn a profit of Rs. 40,000 = Target Profit / Contribution per unit
Contribution per unit = Selling Price per unit – Variable Cost per unit = Rs.100 – Rs.100 = Rs.0
Units to be sold to earn a profit of Rs. 40,000 = Rs.(-8,60,000) / Rs.0 = Undefined
As there is no contribution earned in the second period, the number of units to earn a profit of Rs. 40,000
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A company sold in two successive periods 7000 units and 9000 units and had incurred a loss of Rs.10,000 and earned Rs.10000 as profit respectively. The selling price per unit can be assumed as Rs.100. Calculate: (i) P/V Ratio (ii) The amount of fixed Cost (iii) The number of units to break-even (iv) The number of units to earn a profit of Rs. 40,000.?
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A company sold in two successive periods 7000 units and 9000 units and had incurred a loss of Rs.10,000 and earned Rs.10000 as profit respectively. The selling price per unit can be assumed as Rs.100. Calculate: (i) P/V Ratio (ii) The amount of fixed Cost (iii) The number of units to break-even (iv) The number of units to earn a profit of Rs. 40,000.? for Class 11 2024 is part of Class 11 preparation. The Question and answers have been prepared according to the Class 11 exam syllabus. Information about A company sold in two successive periods 7000 units and 9000 units and had incurred a loss of Rs.10,000 and earned Rs.10000 as profit respectively. The selling price per unit can be assumed as Rs.100. Calculate: (i) P/V Ratio (ii) The amount of fixed Cost (iii) The number of units to break-even (iv) The number of units to earn a profit of Rs. 40,000.? covers all topics & solutions for Class 11 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for A company sold in two successive periods 7000 units and 9000 units and had incurred a loss of Rs.10,000 and earned Rs.10000 as profit respectively. The selling price per unit can be assumed as Rs.100. Calculate: (i) P/V Ratio (ii) The amount of fixed Cost (iii) The number of units to break-even (iv) The number of units to earn a profit of Rs. 40,000.?.
A company sold in two successive periods 7000 units and 9000 units and had incurred a loss of Rs.10,000 and earned Rs.10000 as profit respectively. The selling price per unit can be assumed as Rs.100. Calculate: (i) P/V Ratio (ii) The amount of fixed Cost (iii) The number of units to break-even (iv) The number of units to earn a profit of Rs. 40,000.? for Class 11 2024 is part of Class 11 preparation. The Question and answers have been prepared according to the Class 11 exam syllabus. Information about A company sold in two successive periods 7000 units and 9000 units and had incurred a loss of Rs.10,000 and earned Rs.10000 as profit respectively. The selling price per unit can be assumed as Rs.100. Calculate: (i) P/V Ratio (ii) The amount of fixed Cost (iii) The number of units to break-even (iv) The number of units to earn a profit of Rs. 40,000.? covers all topics & solutions for Class 11 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for A company sold in two successive periods 7000 units and 9000 units and had incurred a loss of Rs.10,000 and earned Rs.10000 as profit respectively. The selling price per unit can be assumed as Rs.100. Calculate: (i) P/V Ratio (ii) The amount of fixed Cost (iii) The number of units to break-even (iv) The number of units to earn a profit of Rs. 40,000.?.
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A company sold in two successive periods 7000 units and 9000 units and had incurred a loss of Rs.10,000 and earned Rs.10000 as profit respectively. The selling price per unit can be assumed as Rs.100. Calculate: (i) P/V Ratio (ii) The amount of fixed Cost (iii) The number of units to break-even (iv) The number of units to earn a profit of Rs. 40,000.?, a detailed solution for A company sold in two successive periods 7000 units and 9000 units and had incurred a loss of Rs.10,000 and earned Rs.10000 as profit respectively. The selling price per unit can be assumed as Rs.100. Calculate: (i) P/V Ratio (ii) The amount of fixed Cost (iii) The number of units to break-even (iv) The number of units to earn a profit of Rs. 40,000.? has been provided alongside types of A company sold in two successive periods 7000 units and 9000 units and had incurred a loss of Rs.10,000 and earned Rs.10000 as profit respectively. The selling price per unit can be assumed as Rs.100. Calculate: (i) P/V Ratio (ii) The amount of fixed Cost (iii) The number of units to break-even (iv) The number of units to earn a profit of Rs. 40,000.? theory, EduRev gives you an
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