Total sales Rs. 20,00,000; Fixed expenses Rs. 4,00,000; P/V Ratio 40%; Break-even capacity in percentage is .a.50% .b.40% .c.60% .d.45%.
Question
Solution 1
The break-even point is the point at which total revenue equals total costs, resulting in neither profit nor loss. To calculate the break-even point in terms of capacity, we need to know the fixed costs and the contribution margin ratio (also known as the P/V ratio).
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