Selling price ₹50, variable cost ₹30, fixed cost ₹1,00,000. Profit at 8,000 units is:
A₹80,000
B₹40,000
C₹50,000
D₹60,000
Answer & Solution
Correct answer: D. ₹60,000
1. Contribution per unit = 50 − 30 = ₹20.
2. Total contribution at 8,000 units = 20 × 8,000 = ₹1,60,000.
3. Profit = Total contribution − Fixed cost = 1,60,000 − 1,00,000.
4. = ₹60,000.
_Source: ICAI BoS Inter Paper 3, Ch 14 "Marginal Costing", §14.7 Illus 8_
Related questions
At the break-even point,A higher contribution to sales ratio implies thatIf the margin of safety is 21.875 per cent of sales, break-even sales are what share of saMargin of safety isFixed cost is 1,50,000 and contribution per unit is 15. Units needed to earn a profit of 2Fixed cost is 1,50,000 and contribution per unit is 15. The break-even point in units isSelling price is 30 per unit and variable cost is 15 per unit. The P/V ratio isContribution is defined as