KR Corporation's break-even point in sales is Rs. 900,000, and its variable expenses are 75% of sales

KR Corporation's break-even point in sales is Rs. 900,000, and its variable expenses are 75% of sales. If the company lost Rs. 32,000 last year, sales must have amounted to

Solutions

Expert Solution

Contribution margin ratio = 1 - variable expense ratio

= 1 - 0.75

= 0.25

Break-even-point in sales = Fixed expenses / Contribution margin ratio

Rs. 900,000 = Fixed expenses / 0.25

Fixed expenses = $225,000

Profit = (Sales x Contribution margin ratio ) - Fixed expenses

- $32,000 = (Sales x 0.25) - $225,000

(Sales x 0.25) = -$32,000 + $225,000

Sales = $772,000

Contribution margin ratio = 1 - variable expense ratio

Break-even-point in sales = Fixed expenses / Contribution margin ratio

DEEPIKA GOYAL answered 1 year ago

Next > < Previous

Related Solutions

What is the break-even point in unit sales?

Oslo Company prepared the following contribution format income statement based on a sales volume of 1,000 units (the relevant range of production is 500 units to 1,500 units): Sales $ 90,000 Variable expenses 49,500 Contribution margin 40,500 Fixed expenses 33,210 Net operating income $ 7,290 What is the break-even point in unit sales?

The Soma Inn is trying to determine its break-even point. The inn has 75 rooms that...

The Soma Inn is trying to determine its break-even point. The inn has 75 rooms that are rented at $52 a night. Operating costs are as follows. Salaries $5,250 per month Utilities 2,100 per month Depreciation 1,500 per month Maintenance 900 per month Maid service 7 per room Other costs 32 per room. Determine the inn’s break-even point in (1) number of rented rooms per month and (2) dollars. If the inn plans on renting an average of 50 rooms...

The Soma Inn is trying to determine its break-even point. The inn has 75 rooms that...

The Soma Inn is trying to determine its break-even point. The inn has 75 rooms that are rented at $ 60 a night. Operating costs are as follows. Salaries $ 11,800 per month Utilities 2,100 per month Depreciation 1,500 per month Maintenance 800 per month Maid service 8 per room Other costs 34 per room Determine the inn’s break-even point in (1) number of rented rooms per month and (2) dollars. 1. Break-even point in rooms 2. Break-even point $...

The Soma Inn is trying to determine its break-even point. The inn has 75 rooms that...

The Soma Inn is trying to determine its break-even point. The inn has 75 rooms that are rented at $56 a night. Operating costs are as follows. Salaries $11,950 per month Utilities 2,100 per month Depreciation 1,400 per month Maintenance 750 per month Maid service 7 per room Other costs 31 per room Determine the inn’s break-even point in (1) number of rented rooms per month and (2) dollars. 1. Break-even point in rooms 2. Break-even point $ If the...

The Soma Inn is trying to determine its break-even point. The inn has 75 rooms that...

The Soma Inn is trying to determine its break-even point. The inn has 75 rooms that are rented at $60 a night. Operating costs are as follows. Salaries $9,700 per month Utilities 2,700 per month Depreciation 1,300 per month Maintenance 700 per month Maid service 8 per room Other costs 34 per room New attempt is in progress. Some of the new entries may impact the last attempt grading.Your answer is incorrect. Determine the inn’s break-even point in (1) number...

10) Atlantic Company sells a product with a break-even point of 4,664 sales units. The variable...

10) Atlantic Company sells a product with a break-even point of 4,664 sales units. The variable cost is $93 per unit, and fixed costs are $153,912. Determine the following: a. Unit sales price $ b. Break-even point in sales units if the company desires a target profit of $33,858 units 9) Which of the following graphs in Figure 1 illustrates the behavior of a total variable cost? a.Graph 3 b.Graph 2 c.Graph 1 d.Graph 4 8) Adirondack Marketing Inc. manufactures...

Break-Even Point

S.S Corporation had sales of Rs. 4,500,000. The fixed expense was Rs. 1,200,000 and variable expense totaled Rs. 1,800,000. You are required to calculate Break-Even Point for S.S Corporation.

Determine the (a) break-even point in sales units and (b) break-even point in sales units assuming that the selling price is increased to $67 per unit

Nicolas Enterprises sells a product for $60 per unit. The variable cost is $35 per unit, while fixed costs are $80,000. Determine the (a) break-even point in sales units and (b) break-even point in sales units assuming that the selling price is increased to $67 per unit

how does the break-even point fit into this discussion? What is the break-even point? Why is...

how does the break-even point fit into this discussion? What is the break-even point? Why is it an important concept in managerial accounting? What are its uses?

The variable in even break analysisare?

Subjects