Question
M/s Forgetful Orientation Pvt Ltd ( a cent percent equity financed company whose effective tax rate is 40%) had incurred fixed expenses of INR 4.5
M/s Forgetful Orientation Pvt Ltd ( a cent percent equity financed company whose effective tax rate is 40%) had incurred fixed expenses of INR 4.5 crores, achieved sales of INR 15 crores and earned a profit (i.e. PBT) of INR 3 crores during the first half year of operation (i.e. 6 months). However, considering the whole year of operation, the said company actually earned a total profit (i.e. PBT) of INR 1.5 crores. The fixed expenses of the concerned company are evenly spread across the year and the selling price per unit and variable cost per unit remained unaltered during the year under review. Required: a. The Break even sales of the concerned company (in respect of the whole year) would amount to? b. Considering the whole year of operation of the concerned company, the contribution margin % of the company i.e. (Contribution/Sales) is?
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