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Hello students, here is a question.
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A company sells its product for 15 per unit in a period.
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If the producer and sells 8000 units, it occurred a loss of 5 per unit.
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If the volume is raised to 20000 unit, selling price remaining the same, it earns the profit of 4 per unit.
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Calculate break -even point both in the terms of rupees as well as units.
00:23
Also, we need to calculate margin of safety.
00:27
So, before calculating margin of safety, we have to calculate break -even point.
00:32
So, calculation of variable cost and the fixed cost at a low method that will be using high -low method.
00:40
It is total cost is 20000 units that is 15 minus 4 into 20000 which gives us 220000.
00:57
So, total cost for 8000 will be 15 plus 15, 15 plus 5 into 8000 which gives us 160000.
01:15
So, units and cost will be, so high level it is 20000 and cost will be 220000.
01:27
So, low level it is 8000 and it comes to 160000.
01:38
So, the difference will be 12000 and 60000.
01:43
So, next will be difference in cost.
01:50
So, for a, it is difference of cost.
01:57
So, difference of cost is 60000 and difference in unit will be 12000 which gives us 5000.
02:12
So, we have to divide a divided by b which is 5000.
02:18
So, now there is a working note for this.
02:26
A total cost will be 220000 rupees and 160000 rupees cost.
02:34
So, total units are 20000 and 8000.
02:45
So, variable cost per unit will be 5000 for both.
03:03
So, next will be d that is total variable cost that is 140000...