Corporate Finance - Corporate Finance Section 2
- Option : A
- Explanation : For Habitt QBE = (F + C) / (P - V) = (Rs.40million + Rs.30million) / (Rs.2000 – Rs.1200) = 0.0875 million For Machinesque: QBE = (F + C) / (P - V) = (Rs.75million + Rs.30million) / (Rs.2000 – Rs.1000) = 0.105 million.
| Revenue | Rs. 0.12 million per TV set |
| Variable cost | Rs. 0.053 million per TV set |
| Fixed cost (including interest cost) | Rs. 200 billion |
The breakeven quantity is closest to:
- Option : C
- Explanation : QBE = (F + C) / (P - V) = (200 billion) / (0.12 - 0.053)million = 2.99 million.
- Option : B
- Explanation : QOBE = (Fixed cost) / (Contribution margin) = F / (P - V) = 15,000 / 15 = 1,000
- Option : B
- Explanation : The operating breakeven point is: QOBE = (Fixed costs) / (Contribution margin) = $48,000 / $24 = 2,000.
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