Marginal Cost Accounting Lecture | T.Y.B.Com and M.com Marginal Cost and Absorption Cost Lecture

Illustration 1
1) From the following data, calculate Break-even Point ( B∈P)
Selling Price Per Unit `40/-
Variable Cost Per Unit `30/-
Fixed overheads `40,000.

If sales are 20% above B∈P , calculate the net profit.

ANS:

1) P/V Ratio = Contribution X 100

Sales

p/v ratio = 10 x 100

= 25%

2) B P ∈ (in `) = Fixed Overheads

PV Ratio

= 40000

25%

= 160000

If sales are 20% above B∈P , calculate the net profit.

BEP = 160000 + 32000 (20%) = 192000

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