XYZ Ltd. has supplied you the following information in respect of one of its products:Total fixed costs Rs. 18,000Total variable costs Rs. 30,000Total sales Rs. 60,000Unit sold 20,000
Question
XYZ Ltd. has supplied you the following information in respect of one of its products:Total fixed costs Rs. 18,000Total variable costs Rs. 30,000Total sales Rs. 60,000Unit sold 20,000
Solution
Sure, I can help you analyze the information provided by XYZ Ltd. Let's break it down step by step:
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Total fixed costs: Rs. 18,000 This refers to the costs that remain constant regardless of the level of production or sales. In this case, XYZ Ltd. has incurred fixed costs amounting to Rs. 18,000.
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Total variable costs: Rs. 30,000 Variable costs are expenses that change in proportion to the level of production or sales. XYZ Ltd. has incurred variable costs amounting to Rs. 30,000.
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Total sales: Rs. 60,000 This represents the total revenue generated from the sales of the product. In this case, XYZ Ltd. has made sales amounting to Rs. 60,000.
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Units sold: 20,000 This indicates the number of units of the product that have been sold. XYZ Ltd. has sold 20,000 units.
Now, let's calculate some additional metrics:
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Contribution margin per unit: The contribution margin per unit can be calculated by subtracting the variable cost per unit from the selling price per unit. In this case, the contribution margin per unit would be (Rs. 60,000 - Rs. 30,000) / 20,000 = Rs. 1 per unit.
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Total contribution margin: The total contribution margin can be calculated by multiplying the contribution margin per unit by the number of units sold. In this case, the total contribution margin would be Rs. 1 * 20,000 = Rs. 20,000.
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Total profit: To calculate the total profit, we need to subtract the total fixed costs from the total contribution margin. In this case, the total profit would be Rs. 20,000 - Rs. 18,000 = Rs. 2,000.
Therefore, based on the information provided, XYZ Ltd. has made a profit of Rs. 2,000 from the sales of this product.
Similar Questions
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