1,68,00.000 28% = 600,00,000 () Contribution for Sales Volume of 800,00,000 = P/V Ratio x Sales = 28% x 800,00,000 = 224,00,000 Profits - Contribution - Fixed costs = 224,00,000 -168,00,000 = 56.00.000 3 100 (iii) If Selling Price is Variable Cost is 100 - 328) 72 90 New Selling Price 100-10%) New Contribution (90 - 372) 18 |32 New PN Ratio = 18 x 100 20% 90 Contribution for Sales Volume of 600,00,000 for the year 2013-14 =PN Ratio x Sales = 28% x 600,00,000 = 168,00,000 Desired Profits - Contribution - Fixed Costs 168,00.000 - 168,00,000 Nil Fixed Costs + Desired Profits Required Sales Volume = P/V Ratio 31,68,00,000 20% - 2840,00,000 - Two manufacturing companies which have the following operating details decided to merge: Company - Company - 11 Capacity utilization (%) 90 60 Sales In lakhs) 540 300 Variable costs In lakhs) 396 225 Fixed costs in lakhs) 80 50 Assuming that the proposal is implemented, calculate - 0 Break-even sales of the merged plant and the capacity utilization at that stage. () Profitability of the merged plant at 80% capacity utilization. (i) Sales turnover of the merged plant to earn a profit of 75 lakh. (iv) When the merged plant is working at a capacity to earn a profit of 75 lakh, what percentage increase in selling price is required to sustain an increase of 5% in fixed overheads