The HASF Ink Ltd income statement for the preceding year is presented below except as noted the cost / revenue relationship for the coming year is expected to follow the same pattern as in the preceding year income statement for the year ending March 31 is as follow s Sales (200,000 units @ 2.5 Each) Rs. 5, 00,000 Variable cost 3, 00,000 Contribution margin 2, 00,000 Less Fixed cost 100,000 Profit before tax 100,000 Less tax 35,000 Profit after tax 65,000 Required The company management feels that it should earn at least Rs.10000 pre taxes per annum on the new investment what sales volume is required to enable the company to maintain existing profit. At what level of sales will the company be able to maintain its present pre- tax profit position even after expansion? What is the break- even point in amount ? Compute gross profit if we use Absorption costing
The HASF Ink Ltd income statement for the preceding year is presented below except as noted the cost / revenue relationship for the coming year is expected to follow the same pattern as in the preceding year income statement for the year ending March 31 is as follow s
Sales (200,000 units @ 2.5 Each) Rs. 5, 00,000
Variable cost 3, 00,000
Contribution margin 2, 00,000
Less Fixed cost 100,000
Profit before tax 100,000
Less tax 35,000
Profit after tax 65,000
Required
- The company management feels that it should earn at least Rs.10000 pre taxes per annum on the new investment what sales volume is required to enable the company to maintain existing profit.
- At what level of sales will the company be able to maintain its present pre- tax profit position even after expansion?
-
What is the break- even point in amount ?
-
Compute gross profit if we use Absorption costing
Step by step
Solved in 5 steps
