ЁЯУв Too many exams? DonтАЩt know which one suits you best? Book Your Free Expert ЁЯСЙ call Now!

    Question

    What would be the break even units if the Fixed Cost is

    Rs.1,00,000 and PV ratio is 25%. The company sells its product at Rs.60 per unit.
    A 2222 Units Correct Answer Incorrect Answer
    B 2500 Units Correct Answer Incorrect Answer
    C 8889 Units Correct Answer Incorrect Answer
    D 3500 Units Correct Answer Incorrect Answer
    E 6667 Units Correct Answer Incorrect Answer

    Solution

    BEP in Units = Fixed Cost / Contribution per unit 1,00,000/15 =6666.66 (6667 Units approx.) 4,00,000 / 60= 6667 Contribution per unit = SPPU * PV ratio = 60 Rs * 25% = 15 Rs ┬а Alternatively, ┬а Calculated BEP in Value: FC/ PV ratio 1,00,000 / 25%= 4 lakhs sales ┬а Now divide the BEP sales value by selling price per unit to arrive at BEP in units. 4,00,000/60 = 6666.66 ┬а

    Practice Next
    More Financial Management Questions
    ask-question