Same data: Target profit ₹2,00,000 demands sales of:
A₹16,00,000
B₹12,00,000
C₹14,00,000
D₹15,00,000
Answer & Solution
Correct answer: D. ₹15,00,000
1. Required contribution = Fixed cost + Target profit = 4,00,000 + 2,00,000 = ₹6,00,000.
2. Required sales = Contribution / P/V ratio = 6,00,000 / 0.40.
3. = ₹15,00,000.
4. The 50% over BEP figure matches the target profit at half of fixed cost.
_Source: ICAI BoS Inter Paper 3, Ch 14 "Marginal Costing", §14.7 Illus 9_
Related questions
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