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February 8th, 2012, 02:58 PM   #1
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Financial and Management Accounting

Q4. Given variable cost Rs.5,00,000. Fixed cost Rs.3,00,000. Net profit Rs.1,00,000. Sales Rs.10,00,000. Find (a) MCSR (b) BEP (c) Profit when sales amounted Rs.12,00,000 (d) sales required to earn a profit of Rs.2,00,000.
Hint: Your answers should match this (a)600000 ; (b) 600000; (c) 600000 ; (d) 1000000

Can anyone answer this question plz
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February 12th, 2012, 06:44 PM   #2
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Re: Financial and Management Accounting

That's the easy way, but if the class is more "formula" oriented, break even is also:

where P is the sales price per unit and V is the variable per unit.

It would also help to know the contribution margin statement:
= Contribution Margin
- Fixed
=Operating Profit

The sales, variable and contribution margin can all be done per unit or in total, depending on what information you have. Remember that break even means 0 profit, therefore at break even, contribution margin has to equal fixed costs.

-- Can be done in units or in totals, just be consistent.

When using the contribution margin statement to solve, you'll generally have to utilize the contribution margin ratio. Keep in mind that sales and variable costs are going to vary with production level, but the ratio between them does not change. So once you have that ratio, you can keep using it. (Unless a problem specifically tells you something has changed.)

You can do target profit in the contribution margin statement by filling in "operating profit" with your desired profit and working backwards up the statement.

That's a lot of information for you to work with. Please make some attempt at doing it, and if you'll post that I'll see how you're doing. (Oh, and I don't know what MCSR means. Not familiar with that abbreviation.)
Erimess is offline  
February 14th, 2012, 04:48 PM   #3
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MCSR means marginal contribution sales ratio.
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February 15th, 2012, 04:52 AM   #4
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Re: Financial and Management Accounting

Well, that meant zip to me, so I had to go hunt it down. We call it a contribution margin ratio in these here parts.

almazz, these are all basic equations. And while looking up what MCSR meant, I found this thing: ... alysis.pdf

Exact same problem (it's even #4), with different numbers. And all the equations are in there. If you don't understand what something means, ask. If all you want is the "answers" you can plug in and solve it just as well as we can. Not to mention the answers are in the back of the thing.
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