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Calculation of BEP

This document calculates the break even point (BEP) and break even sales (BES) for a company based on its sales, variable costs, marginal contribution, and fixed costs. It finds that the company's BEP is 6,495 units, meaning that is the production level required to cover fixed costs. It also determines the BES is Rs. 81,098.6, or the sales level required to cover fixed costs based on the company's profit-volume ratio of 42.04%.

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Sonal Wadhwa
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109 views

Calculation of BEP

This document calculates the break even point (BEP) and break even sales (BES) for a company based on its sales, variable costs, marginal contribution, and fixed costs. It finds that the company's BEP is 6,495 units, meaning that is the production level required to cover fixed costs. It also determines the BES is Rs. 81,098.6, or the sales level required to cover fixed costs based on the company's profit-volume ratio of 42.04%.

Uploaded by

Sonal Wadhwa
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOC, PDF, TXT or read online on Scribd
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Calculation of BEP (break even point) and BES (break even sales):

Particulars Amount Amount Units Units


Sales 17,83,140 178.314

Less: Variable cost:


Direct Material 246,000 24.6
Direct Labour 361,000 36.1
Direct expenses 10,000 1
Factory Overheads 66,000 38.35
Office Overheads 270,500 28.55
Selling and Distribution Overheads 79,950 -1,033,450 20 -148.6

Marginal Contribution 7,49,690 29.714

Less: Fixed cost: 193,000 -193,000 19.3 -19.3

PROFIT 5,56,690 10.414

Profit- Volume ratio= Contribution / sales * 100


= 7,49,690 / 17,83,140 * 100
= 42.04 %

BES= Fixed cost / Profit- volume ratio


= 193,000 / 42.04 %
= 81,098.6 Rs.

BEP= Fixed cost / per unit marginal cost


= 193,000 / 29.714
= 6,495 units

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