MGT402 GDB Idea Solution

Dear Students....


here its idea solution.....please comment am right or wrong....

Part 1)

BEP Sales = Fixed/Contribution margin ratio

150000 = Fixed /84%

150000 = Fixed /0.84

Fixed = 150000 x 0.84

Fixed = 126000

Part 2)

Target contribution = Target profit + Fixed cost

Target contribution = 42000 + 126000

Target contribution = 168000

Part 3)

Contribution margin ration = Contribution margin / sales

0.84 = 168000/sales

Sales = 168000/0.84

Sales = 200000

Sales 200000

Less: Variable (3200)

Contribution margin 168000

Less: Fixed Cost (126000)

Profit 42000