The following information is given by R ltd for the year 2015-16:
Profit Rs 12,000
Fixed Cost Rs 24,000
Margin of Safety Rs.30,000
For the year 2016-17, it is anticipated that the variable cost and Fixed Cost will decrease by 25% and selling price will fall by 10%.
Calculate for the year 2016-17:
i) Sales to earn profit @10% on sales and Margin of safety
ii) Profits if the sales are anticipated at 10% above the present break- even point.
Sample Solution