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Academic MBA Question:

MBA Assignment Question: You work for a strategic consulting firm specializing in Cost Optimization; ABC Company is looking for some advice regarding Break Even Sales, Margin of Safety, and impact of selling price on the two metrics. The company has provided you the following information:

  • Sales Units 10,000
  • Selling Price ₹ 15
  • Total Cost ₹ 75,000
  • Fixed Cost ₹ 20,000
  • Net Profit ₹ 25,000

Using the above information, you are required to:

a. Calculate Break Even Sales (in ₹) and Margin of Safety (in ₹)

b. Calculate the new Break Even Sales and Margin of Safety if the selling price is increased by 20%.


Academic Assignment Answer:

Single Question and Answer