A cellular phone company sells phones for Tk. 5,000. The unit variable cost per phone is Tk. 2,500 plus a selling, commission of 10%. Fixed manufacturing cost total Tk. 65,000 per month, while fixed selling and administrative costs total Tk. 1,50,000.
Required :
(i) What is the contribution margin per phone?
(ii) What is the breakeven point in phones?
(iii) How many phones must be sold to earn a targeted profit of Tk. 3,75,000?

Question

A cellular phone company sells phones for Tk. 5,000. The unit variable cost per phone is Tk. 2,500 plus a selling, commission of 10%. Fixed manufacturing cost total Tk. 65,000 per month, while fixed selling and administrative costs total Tk. 1,50,000.

Required :
(i) What is the contribution margin per phone?
(ii) What is the breakeven point in phones?
(iii) How many phones must be sold to earn a targeted profit of Tk. 3,75,000?

Satt Academy · Accepted Answer

A cellular phone company sells phones for Tk. 5,000. The unit variable cost per phone is Tk. 2,500 plus a selling, commission of 10%. Fixed manufacturing cost total Tk. 65,000 per month, while fixed selling and administrative costs total Tk. 1,50,000.

Required :
(i) What is the contribution margin per phone?
(ii) What is the breakeven point in phones?
(iii) How many phones must be sold to earn a targeted profit of Tk. 3,75,000?

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