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Q.12 The following information is given by Star Ltd. :Margin of Safety1,87,500Total Cost1,93,750Margin of Safety3,750 unitsBreak-even Sales1,250 unitsRequired:Calculate Profit, P/V Ratio, BEP Sales (in ₹ ) and Fixed Cost.​

Answer»

To CALCULATE a break-even point based on units: Divide FIXED COSTS by the revenue per unit minus the variable cost per unit. The fixed costs are those that do not change no matter how MANY units are sold. The revenue is the PRICE for which you're selling the product minus the variable costs, like labor and materials.



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