Illustration

From the following figures, calculate,

1. Break Even Point.

2. Sales to earn a profit of Rs.1,20,000.

Solution

Contribution

= Sales - Variable Cost = Rs.4,00,000 - Rs.2,80,000 = Rs.1,20,000

P/V Ratio =

=

= 30%

1. Calculation of Break Even Point

Break Even Point  (in Rupees)

1. Sales to earn a profit of Rs.1,20,000

Break Even Point (Rs.) =		= Rs.10,00,000

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