Breakeven Point Calculation In Terms Of Sales And Units

Question

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:

Alpha Company
Profit and Loss Account for December 2012  
                                                  €
Sales (21,500 units)                1720,000
Less: Variable Costs                   967500
                                              ________
Contribution                               752500
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).

Summary

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

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