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Same data: at 12,000 units, flexible-budget profit equals:
A₹5,00,000
B₹3,00,000
C₹4,20,000
D₹6,00,000
Answer & Solution
Correct answer: C. ₹4,20,000
1. Total contribution at 12,000 units = (100 − 40) × 12,000 = ₹7,20,000.
2. Less fixed cost ₹3,00,000.
3. Profit = 7,20,000 − 3,00,000.
4. = ₹4,20,000.
_Source: ICAI BoS Inter Paper 3, Ch 15 "Budget", §15.8.1 Illus 6b_
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