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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 200The 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.150,000a) 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) 625×200=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.
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