Following information relates to an organization:
Direct Material Rs. 45
Direct Labour Rs. 35
Direct other expenses Rs. 25
Variable Overhead Rs. 15
Fixed Overhead Rs. 25
Profit Rs. 55
Selling Price Rs 200
The expected sales & production are 2000 units. Calculate:
a. Contribution per unit
b. Breakeven point in units
c. C/S ratio
d. Breakeven sales revenue
e. Number of units to be sold to generate a profit of Rs.100,000
f. The sales revenue required to generate a profit of Rs.150,000
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PMI need help to solve this CVP analysis question pls, parts (e) and (f) specially
a) Contribution per unit is 45+35+25+15= 120 is cost per unit sold and absorption of fixed overhead is ignored. 200-120 =80. 80 is contribution per unit sold.
b) Fixed costs 25 x 2000 =50000 50000/80= 625 units
c)80/200
d) 625x200=125000
e)(fixed costs to be covered + profit target)/contribution per unit
50000+100000/80=1875 units need to be sold
f) same equation as above 50000+150000/80=2500 units
E) 50000+100000/80 = 1875 UNITS
F) 50000+150000/80 = 2500 UNITS x 200 = 500,000 sales revenue.
The break even in Revenue is= fixed costs/cs ratio=(25*2000)/0,4=125000 Rs
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