Zebu has given the following details for two years: 2019-20 2020-21 Sales 800,000 ? PV Ratio 50% 37.50% MOS as a % of total sales 40% 21.875% Savings in fixed cost in fixed cost in year 2020-21 due to restruturing process. The company maintain its sales quantity level of 2019-20 in 2020-21 by reducing price. Compute: 1. Sales for the year 2020-21 in value, 2. Fixed cost for 2020-21 in value, 3. Break even sales for 2021

Zebu has given the following details for two years: 2019-20 2020-21 Sales 800,000 ? PV Ratio 50% 37.50% MOS as a % of total sales 40% 21.875% Savings in fixed cost in fixed cost in year 2020-21 due to restruturing process. The company maintain its sales quantity level of 2019-20 in 2020-21 by reducing price. Compute: 1. Sales for the year 2020-21 in value, 2. Fixed cost for 2020-21 in value, 3. Break even sales for 2021

Survey of Accounting (Accounting I)

8th Edition

ISBN:9781305961883

Author:Carl Warren

Publisher:Carl Warren

Chapter11: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 11.16E

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Concept explainers

Pricing

Pricing is used as a term in finance and economics, pricing is the process of fixing a value for a product or a service. Pricing establishes a value for a product or service that the customer has to pay. A business can choose from different strategies while deciding to set prices.

Question

Zebu has given the following details for two years:
2019-20
2020-21
Sales
800,000
?
PV Ratio
50%
37.50%
MOS as a %
40%
21.875%
of total sales
Savings in fixed cost in fixed cost in year 2020-21 due to restruturing process.
The company maintain its sales quantity level of 2019-20 in 2020-21 by reducing price.
Compute:
1. Sales for the year 2020-21 in value, 2. Fixed cost for 2020-21 in value, 3. Break even sales for 2021

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