Answered: a profit of rs.45,000 Fixed…

a profit of rs.45,000 Fixed expenses=rs.90000 Variable cost per unit: Direct material=rs.5 Direct labour=rs.2 Direct overheads=100% of direct labour selling price per unPit

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

From the following data, you are required to calculate

1) p/v ratio 2) break even sale with the help of p/v ratio 3)sales required to earn a profit of rs.45,000

Fixed expenses=rs.90000

Variable cost per unit:

Direct material=rs.5

Direct labour=rs.2

Direct overheads=100% of direct labour selling price per unPit-rs.12

Definition Definition Indirect costs incurred while producing goods or services. Overhead costs cannot be directly attributed to products or services. Overhead includes indirect material cost, indirect labor cost, rent, utilities expenses, and depreciation. Since these costs directly affect the profitability of a company, managing overhead becomes an important task for management.

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