Cost Volume Profit Analysis Break-Even Point, CM ratio, Margin of Safety (6.50) Universal product distributes single product a woven basket whose selling price is Rs.15 and variable expense is Rs.12...

Cost Volume Profit Analysis Break-Even Point, CM ratio, Margin of Safety  (6.50)

1. Universal product distributes single product a woven basket whose selling price is Rs.15 and variable expense is Rs.12 per unit. The company’s monthly fixed expense is Rs. 4,200.

Required:

Using Equation method:

1. Compute break-even point in unit sales.                                     (1.0)


2. Compute break-even point in sales dollars and contribution margin ratio.                         (1.0)

Using Formula method:

1. Compute break-even point in unit sales.                         (1.0)


2. Compute break-even point in sales dollars and CM ratio.                                                      (1.0)

1. MC distributes sun umbrella for resort hotels. Data concerning next month’s budget appears below:

Selling price                                   Rs. 30 per unit

Variable expenses                           Rs. 20 per unit

Fixed expenses                               Rs. 7,500 per month

Unit sales                                       1,000 units per month

Required:

1. Compute company’s Margin of safety. (2.0)

Compute company’s Margin of safety as a percentage of sales