Q-3 MNP Ltd sold 2,75,000 units of its product at 375 per unit. Variable costs are 175 per unit (manufacturing costs of 140 and selling cost 35 per unit). Fixed costs are incurred uniformly throughout the year and amount to 3,50,00,000 (including depreciation of 1,50,00,000). there are no beginning or ending inventories. Required: (i) Compute breakeven sales level quantity and cash breakeven sales level quantity. (ii) Compute the P/V ratio. (iii) Compute the number of units that must be sold to earn an income (EBIT) of 25,00,000.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Question
Accounting
Q-3 MNP Ltd sold 2,75,000 units of its product at 375 per unit. Variable costs are 175 per unit (manufacturing
costs of 140 and selling cost 35 per unit). Fixed costs are incurred uniformly throughout the year and
amount to 3,50,00,000 (including depreciation of 1,50,00,000). there are no beginning or ending
inventories.
Required:
(i) Compute breakeven sales level quantity and cash breakeven sales level quantily.
(ii) Compute the P/V ratio.
(iii) Compute the number of units that must be sold to earn an income (EBIT) of 25,00,000.
Transcribed Image Text:Q-3 MNP Ltd sold 2,75,000 units of its product at 375 per unit. Variable costs are 175 per unit (manufacturing costs of 140 and selling cost 35 per unit). Fixed costs are incurred uniformly throughout the year and amount to 3,50,00,000 (including depreciation of 1,50,00,000). there are no beginning or ending inventories. Required: (i) Compute breakeven sales level quantity and cash breakeven sales level quantily. (ii) Compute the P/V ratio. (iii) Compute the number of units that must be sold to earn an income (EBIT) of 25,00,000.
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