Q51411 For an existing product that sells for SP = Rs.650 per unit, FC = Rs.82,000 and VC = Rs. 240 per unit. (a) What is the BEP? (b) What volume is needed to generate a profit of Rs.10,250?

Solution:

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For volumes > BEP, all contribution of (Rs.650 – 240 = Rs.410/unit) goes into profit. Thus the additional volume needed is Rs.10,250 / Rs.410/unit = 25 units.

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