MGT402 GDB2 Idea Solution For Discussion 12 July 2010

[ahsan_ali]

Here Below My Solved Solution:

A. Fixed Cost = BEP sales * Contribution margin ratio
= Rs.150, 000 * 84%
= Rs.150, 000 * 0.84
= Rs.126, 000
B. Target Contribution Margin = Fixed Cost + Target Profit
= Rs.126, 000 + Rs.42, 000
= Rs.168, 000
C. Sales = Target Contribution margin / Contribution margin ratio
= Rs.168, 000 / 84%
= Rs.168, 000 * 0.84
= Rs.200, 000

Sales 200,000
Less: Variable Cost (200,000 – 168,000) 32,000
Contribution Margin 168,000
Less: Fixed Cost 126,000
Profit 42,000
Amount of Actual Sales = Rs.200, 000

I got Marks 2.000
Grade:Excellent