My Math Forum Financial and Management Accounting

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 February 8th, 2012, 02:58 PM #1 Newbie   Joined: Feb 2012 Posts: 2 Thanks: 0 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
 February 12th, 2012, 06:44 PM #2 Senior Member   Joined: Apr 2011 From: USA Posts: 782 Thanks: 1 Re: Financial and Management Accounting $\text{Break even= \frac{Fixed Costs}{Unit Contribution Margin}}$ $\text{Contribution Margin= Sales - Variable Costs}$ That's the easy way, but if the class is more "formula" oriented, break even is also: $\text{Px= Vx + F}$ 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: Sales -Variable = 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. $\text{Contribution Margin Ratio= Contribution Margin/Sales}$ -- 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.)
 February 14th, 2012, 04:48 PM #3 Global Moderator   Joined: Dec 2006 Posts: 17,524 Thanks: 1318 MCSR means marginal contribution sales ratio.
 February 15th, 2012, 04:52 AM #4 Senior Member   Joined: Apr 2011 From: USA Posts: 782 Thanks: 1 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: http://www.websukat.com/SMU-Books/Finan ... 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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# mcsr in accounts

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