What is the profit (or loss) if 10 units were sold at a selling price of textsterling85, the variable costs per unit was textsterling25 and fixed costs were textsterling300?

BREAK EVEN POINT

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Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]

What is the profit (or loss) if 10 units were sold at a selling price of £85, the variable costs per unit was £25 and fixed costs were £300?

A	300
B	(£300)
C	£300
D	£600

Explanation:

Detailed explanation-1: -Profit may be added to the fixed costs to perform CVP analysis on the desired outcome. For example, if the previous company desired a profit of $50, 000, the necessary total sales revenue is found by dividing $150, 000 (the sum of fixed costs and desired profit) by the contribution margin of 40%.

Detailed explanation-2: -Determine the selling price of the product You can deduct the total variable cost from the total net sale and divide this number by the number of units produced to determine the contribution margin per unit.

Detailed explanation-3: -(E) New break even sales, if sale price is reduced by10% New sales price = 40‐10% = 40‐4 = 36 Marginal cost = Rs. 24 Contribution = Rs. 12 P/V Ratio = Contribution/Sales = 12/36 x100 OR 33.33% Now, s x P/V Ratio = F (at B.E.P. contribution is equal to fixed cost) S x 100/300 = Rs.

Detailed explanation-4: -Normally, as the selling price per unit rises, the break-even point in units declines. Therefore, a decline in selling price per unit will cause a rise in the break-even point.

There is 1 question to complete.

ECONOMICS

COST ACCOUNTING

BREAK EVEN POINT