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From the following information calculate the break-even point and turnover required to can i profit of Rs. 36,000 Fixed Overheads Rs. 1,80,000 Variable cost per unit Rs. 2 If the company is earning a profit of Rs. 36,000, express the margin of safety available to A Rs.20?
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From the following information calculate the break-even point and turn...
Break-Even Analysis:

  • Fixed Overheads: Rs. 36,000

  • Variable Cost per unit: Rs. 2



Calculation of Break-Even Point:

  • Break-Even Point = Fixed Overheads / Contribution per unit

  • Contribution per unit = Selling Price per unit - Variable Cost per unit

  • Selling Price per unit = Variable Cost per unit + Profit per unit = Rs. 2 + Rs. 0 = Rs. 2

  • Contribution per unit = Rs. 2 - Rs. 2 = Rs. 0

  • Break-Even Point = Rs. 36,000 / Rs. 0 = Not Possible



Calculation of Turnover for Profit of Rs. 36,000:

  • Total Contribution = Fixed Overheads + Profit

  • Total Contribution = Rs. 36,000 + Rs. 36,000 = Rs. 72,000

  • Contribution per unit = Selling Price per unit - Variable Cost per unit

  • Selling Price per unit = Variable Cost per unit + Contribution per unit

  • Selling Price per unit = Rs. 2 + Rs. 2 = Rs. 4

  • Turnover = Total Contribution / Contribution per unit

  • Turnover = Rs. 72,000 / Rs. 2 = Rs. 36,000



Margin of Safety:

  • Margin of Safety = Actual Sales - Break-Even Sales

  • Actual Sales = Turnover for Profit of Rs. 36,000

  • Actual Sales = Rs. 36,000

  • Break-Even Sales = Fixed Overheads / Contribution per unit

  • Break-Even Sales = Rs. 36,000 / Rs. 2 = Rs. 18,000

  • Margin of Safety = Rs. 36,000 - Rs. 18,000 = Rs. 18,000

  • Margin of Safety Percentage = (Margin of Safety / Actual Sales) * 100

  • Margin of Safety Percentage = (Rs. 18,000 / Rs. 36,000) * 100 = 50%

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From the following information calculate the break-even point and turnover required to can i profit of Rs. 36,000 Fixed Overheads Rs. 1,80,000 Variable cost per unit Rs. 2 If the company is earning a profit of Rs. 36,000, express the margin of safety available to A Rs.20?
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From the following information calculate the break-even point and turnover required to can i profit of Rs. 36,000 Fixed Overheads Rs. 1,80,000 Variable cost per unit Rs. 2 If the company is earning a profit of Rs. 36,000, express the margin of safety available to A Rs.20? for B Com 2024 is part of B Com preparation. The Question and answers have been prepared according to the B Com exam syllabus. Information about From the following information calculate the break-even point and turnover required to can i profit of Rs. 36,000 Fixed Overheads Rs. 1,80,000 Variable cost per unit Rs. 2 If the company is earning a profit of Rs. 36,000, express the margin of safety available to A Rs.20? covers all topics & solutions for B Com 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for From the following information calculate the break-even point and turnover required to can i profit of Rs. 36,000 Fixed Overheads Rs. 1,80,000 Variable cost per unit Rs. 2 If the company is earning a profit of Rs. 36,000, express the margin of safety available to A Rs.20?.
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