Question # 1
Calculate the breakeven point in units when:
Variable cost
Fixed cost
Sales price
Rs.10 per unit
Rs.42,000
Rs.16 per unit
Question # 2
Calculate the breakeven point in units and in amount when:
Sales price
Rs.1 each
Sales
Rs.60,000
Variable cost (0.5 per unit) Rs.30,000
Fixed cost
Rs.20,000
Question # 3
The following data has been taken out from the record of Osman Bros., based on the financial
result for the year ending 30th June 2008:
Breakeven sales
Rs.2,000,000
Contribution margin ratio
40%
Profit for the year ending 30th June 2008
Rs.320,000
Required:
Calculate the following:
(i)
Fixed expenses for the year.
(ii)
Sales for the year
(iii) Variable expenses for the year
(iv)
Margin of safety ratio.
Question # 4
R Company has prepared the following projections for the coming year 2008:
Rs.
Sales
150,000
Variable cost
(112,500)
Contribution margin
37,500
Fixed cost
(20,000)
Net income
17,500
Required:
Compute the following:
(i)
Breakeven sales in rupees.
(ii)
Margin of safety in rupee and in percentage.
(iii) A minimum unit to be sold to breakeven, if the sale price is Rs.15/unit.
Question # 5
Normal annual capacity of Karachi Company is 200,000 units and the sales price is Rs.32 per
unit. Unit cost of components is as under:
Variable cost per unit (Rs.) Fixed Cost (Rs.)
Direct material
9.00
-Direct labor
10.0
-Factory overhead
2.00
400,000
Non-manufacturing cost
3.00
100,000
Total cost
24.0
500,000
Required:
(i)
Calculate the breakeven point in rupees and in units.
(ii) Compute amount of sales required to earn a profit of Rs.420,000.
Question # 6
Gulliver Engineering Ltd, manufactures lathe machines. Its budget data for next year is as
under:
Rs.
Sales (2,000 units)
8,000,000
Variable cost
3,000,000
Contribution margin
5,000,000
Fixed cost
2,000,000
Operating income
3,000,000
Required:
(i)
Calculate breakeven point in units and amount.
(ii)
Calculate margin of safety in units and amount
Question # 7
The fixed cost of an enterprise for the year is Rs.400,000. The variable cost per unit for a
single product being made is Rs.20. Each unit sells at Rs.100.
Required
(i) Breakeven point.
(ii) If the turnover for the next year is Rs.800,000, calculate the estimated contribution
and profit, assuming that the cost and selling price remain the same.
(iii) A profit target of Rs.400,000 has been desired for the next year. Calculate the
turnover required to achieve the desired result.
Question # 8
The Parrot Company sold 150,000 units @ Rs. 30 each, Variable cost is Rs. 20
(Manufacturing Rs. 15 & Marketing Rs. 5), Fixed Cost is Rs. 1,200,000 annually which
occurs evenly throughout the year (Manufacturing Rs. 800,000 & Marketing Rs. 400,000).
Required
i)
Breakeven point in units
ii)
Breakeven point in Rupees
iii)
Number of units to be sold to earn profit before tax of Rs. 200,000
iv)
Number of units to be sold to earn after tax profit of Rs. 100,000 if tax rate is 25%
v) The breakeven point in units if selling price is increased by Rs. 3 and variable cost by
Rs. 2 per unit.