Cost

Costing

In this ques. Why BEP is not calculated as fixed cost ÷profit ...plz explain

Rifhat Khan

CA Inter

★ 28K+

23-Apr-23 10:16

598

Answers (1)

BEP = Fixed cost / contribution p.u × sales p.u . In this ques, it given that premium is payable for ovetime for above 500 units. Contribution will be change 1 to 500 and above 500 . But as per formula they find it. At BEP, Contribution = Fixed cost. So at 500u Contribution is only 15,000 and balance 1800 is from 72 units.

Gayathri

CA Inter

★ 11K+

23-Apr-23 12:23

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