Question

4. PT. Semanggi prepares the profit and loss report as follows:

Units	2.000
Price per unit	25.000
Sales	50.000.000
Variable Expenses	30.000.000
Contribute Margin	20.000.000
Fixed Costs	18.000.000
Profit	2.000.000

ASKED
a. Using the profit and loss report format, calculate the break-even point in the unit.
b. Using a fundamental break-even equation, calculate the break-even point in the unit
c. How many units should the company sell to generate a profit of Rp. 15,000,000
d. How many units does the company have to sell to generate a profit of 20 percent of income?
e. Assuming a 25 percent income tax rate, how many units should the company sell to generate a tax return of Rp. 15,000,000

Answer 1

a. Calculation of Break Even point using the profit and loss report format-

No. of units sold =2,000

Particulars	Amount	Amount per unit
Sales	50,000,000	25,000
(-)Variable cost	30,000,000	15,000
Contribution Margin	20,000,000	10,000
Fixed Cost	18,000,000
Profit	2,000,000

hence, the Break Even point using the profit and loss report= Fixed Cost+profit/contribution margin

=(18,000,000+2,000,000)/(10,000/25,000)

=1,800 units

2.Calculation of Break Even point Using a fundamental break-even equation=

Fixed Cost/ (Selling price per unit- Variable cost per unit)

=18,000,000/[(50,000,000-30,000,000)/2,000]

=1,800units.

c.Calculation of no. units should the company sell to generate a profit of Rp. 15,000,000

= (Fixed cost+ Profit)/ contribution per unit

=(18,000,000+15,000,000)/[(50,000,000-30,000,000)/2,000]

=33,000,000/10,000

=3,300 units

d .Calculation of no. units should sell to generate a profit of 20 percent of income

= Let the total sales amount be x

then Total sales=( Fixed Cost+0.2x)/ Contribution margin

or, x= (18,000,000+0.2x)/((10,000/25,000)

or, 0.4x= 18,000,000+0.2x

or, x= 90,000,000

Total sales = Rp90,000,000

No. of units required to be sold=  Rp90,000,000/Rp25,000=3,600 units

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