Alpha Company, which sells specially designed envelopes has been in the industry for almost then years. The company’s profit and loss account for the month of December 2012 is given below:
Profit and Loss Account for December 2012
Sales (21,500 units) 1720,000
Less: Variable Costs 967500
Less: Fixed Costs 780000
Net Loss 27500
Calculate the company’s contribution margin ratio and its breakeven point in both units and value (round up to the nearest units).
The question belongs to Finance and it discusses about a scenario of a business which yields a net loss. The breakeven point for this business in terms of units and sales has been calculated in the solution.
Total Word Count 29