marginal costing

This query is : Resolved

Report Abuse Follow Query Ask a Query

pankaj kumar gupta

pankaj kumar gupta (Querist)
Follow

28 April 2010 P V RATIO : 40%

MARGIN OF SAFTY : 40%

SALES VALUE : 1.5 CRORE

FIND

1)BEP
2)FIXED COST
3)PROFIT

CMA Chandan Singh

CMA Chandan Singh (Expert)
Follow

28 April 2010 BEP - Rs 90 Lakhs
Fixed Cost - Rs. 24 Lakh
Profit - 36 Lakhs

Professional Careers Academy

Professional Careers Academy (Expert)
Follow

28 April 2010 as sales is Rs. 1.5 crore and p/v ratio is 40 % so total contribution is Rs. 60 lakh.

as sales is Rs. 1.5 crore and margin of safety is 40 % so margin of safety is Rs. 60 lakh.
as profit = Margin of safety * p/v ratio
so here profit is = Rs. 60 lakh *40 %
= 24 Lakh

as total contribution= profit + fixed cost
so fixed cost= 60 lakh-24 lakh= 36 lakh

BEP= Fixed cost/pv ratio
= 36 lakh/40%=90 lakh

therefore,
BEP= Rs. 90 lakh
fixed cost= Rs.36 lakh
Profit= Rs. 24 lakh

regards,

CA Jatin Bansal
Chandigarh

Upgrade to CAclubindia Pro. Subscribe Now!