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MGT402 - Cost & Management Accounting, Assignment # 02, Opening Date Feb 1st, 2016, Due Date Feb 8th, 2016

Assignment # 02

Cost & Management Accounting (MGT402)



DUE DATE: 08th February, 2016



 Breakeven Analysis


 To understand Breakeven Analysis in terms of units, rupees and in terms of target profit. ASSIGNMENT QUESTION:

Mr. Aslam is manufacturing different home appliances including micro wave ovens in his production unit. These are information about costs and selling price of microwave oven for the month of December 2015.

Description Cost (Rs. Per unit)

Selling price 2950

Cost of raw material 800

Cost of casting process 200

Cost of milling & grinding 400

Cost of polishing 300

Cost of packaging 150

Mr. Aslam also incur Salaries of workers, factory rent and other fixed costs Rs , 1.2, 1.6 and 0.4 million respectively during the month.

Required: Based on the above information of Mr. Aslam’s business, you are required to calculate:

1. Breakeven Point in unit of “microwave ovens” and in rupees for the period. (04 marks)

2. Amount of sales for Target Profit of Rs 1.2 million (02marks)

3. At present, production unit is selling 3,000 microwave ovens per month. Marketing department is convinced that a 16% reduction in the selling price will result in a 30 % increase in the number of microwave oven sold each month. What will be impact on Net Operating Income at present plan and proposed plan by marketing department? Is this change is suitable for production unit? (04 marks)

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Replies to This Discussion

discuss your problems guys

Koi to hint milay k ksy ho ge assignment

break-even point or break-even analysis is contribution margin. In equation format it is defined as follows:

Contribution Margin = Revenues- variable expenses

The contribution margin for one unit of product or one unit of service is defined as:

Contribution Margin = Revenues per unit- variable expenses per unit

The break-even point in units 

break-even point in units=Fixed Expenses per month + contribution margin per unit

Please guide...!

Friends, my answers are as under:
BE sales in units = 2909 units
BE sales in Rs. = Rs. 8.579 Mn

Amount of sales in unit to earn Rs. 1.2Mn = 4000 Units

Net operating Income effect
Profit with present plan = 100,000
Profit with proposed plan = 914,200
Net effect = 814,000

Check through ur own calculations and confirm, plz

Yeh na pochna ke ye kaisey solve kiya hey. Hahahahahaha

hahah plxx explain !!

#Shakeel bro Good work

plz thora Explain to kr dain kindly 

just aap formulas confirm krwadain calculations hum khud krlaingy


Breakeven sales in units  =  Fixed Costs / Contribution Margin

Breakeven Sales in Rupees=  Fixed Costs / C/S Ratio

C/S Ratio        =          Contribution Margin (CM) in Rs / Sales in Rs


Amount of sales =   Target CM / CM per Unit

Target CM         =   Target Profit + Fixed Costs

Amount of sales for Target Profit of Rs 1.2 million



Targeted Profit            =          1200000

Add     Fixed Cost                  =          3200000

            Contribution Margin   =          4400000

Add     Variable Cost              =          5550000

            Sale                             =          9950000

At target profit 1.2 million sales in units are 4000 units and sales in Rupees is 11800000

shakeel bhai aap just formulas betadain calculations hum khud krlaingy

deaqr shakeel sb,

i,m completely busy in my job.dear my job is so tide and very long time duty, so due to short time i,m not give completely time to the study.i,m very worried from this that my all assignment are miss already .my requested to u that if u have a complete answer of this assignment please send me in my personal idd. my gmail idd is


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