Question

In: Accounting

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.

Solutions

Expert Solution

Contribution margin  = Sales - Variable expenses

= Rs. 4,500,000 - Rs. 1,800,000

= Rs. 2,700,000

Contribution margin ratio = Contribution margin / Sales

= Rs. 2,700,000 / Rs. 4,500,000

= 60%

Break-Even Point = Fixed expense /Contribution margin ratio

= Rs. 1,200,000 /60%

= Rs. 2,200,000

 

 

Break-Even Point = Fixed expense /Contribution margin ratio

ANIL KUMAR answered 3 years ago
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