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=12I+0.1A+0.2B+0.14T
=N
Sales turnover per annum
=Item quantity (numbers)×Rate/Unit (Rs)
=54,000×Q=S
Profit (per annum) before tax
=S–N=P
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Net profit ratio=(Profit×100)/Sales turnover=100P/S
Rate of return=(Profit×100)/Total capital Investment=100P/T
Fixed cost (FC) per annum
=Rent per annum+Depreciation on production machinery and equipment @ 10 per cent+Depreciation on office equipment and furniture at 20 per cent+Interest on total capital investment @ 14 per cent+Insurance +40 per cent of human resource costs including salary and wages+40 per cent of other contingencies
Breakeven point (BEP)=[FC/(FC+Profit)]×100
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