Break Even Analysis

Standard

Calculate Break-Even point from the information given below:

Sales = “₹ 1,50,000/-”

Variable Cost = “₹ 1,20,000/-”

Fixed Cost = “₹ 15,000/-”

 

Solution:

 

In this question, Selling price per unit and Variable cost per unit is not given, hence the Break-even point can be calculated by the formula given below:

 

Breakeven point=  (Total Fixed Cost)/(P/V Ratio)

𝑃/𝑉 𝑅𝑎𝑡𝑖𝑜 = C/S  X 100

i.e;  (Sales-Variable Cost)/Sales  X 100

In this question;

𝑃/𝑉 𝑅𝑎𝑡𝑖𝑜 = C/S  X 100

=  (1,50,000-1,20,000)/1,50,000  X 100 = 20%

Breakeven point=  (Total Fixed Cost)/(P/V Ratio)

= 15,000/(20%) = ₹ 75,000/-

 

 

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About booksbysonamsachdeva

Hello Readers! I am Sonam Sachdeva and I am an Author, Lecturer, and yes, now a Blogger. I have a rich experience of 4 years in teaching core Management subjects to more than 1000 students. I have done MBA and BBA from Guru Gobind Singh Indraprastha University, PGDIBO from IGNOU and ACM (HRM) from AIMA. I have also qualified UGC NET & JRF. I am presently empanelled as an Assistant Professor at Delhi University, New Delhi. I have attended various National and International Conferences, Seminars and Workshops. I have written several research papers, case studies and book reviews which have been published in reputed International and National journals. I was a rank holder in my post-graduation and graduation and was a scholar at school. Moreover, I have been an active recruiter in the institutions I served. I am a member of All India Management Association and Delhi Management Association. Teaching is my passion and I hope that through this blog, I will help you become expert in some of the most demanding subjects in Management. I hope that you will like the stuff. For any queries, write at: booksbysonamsachdeva@outlook.com Enjoy reading... Sonam Sachdeva

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