CAF-5 · Chapter 18 · Question 10 of 20
(CVP Analysis: Target Profit after Tax) A company sells for Rs. 800 (VC Rs. 480). Fixed costs are Rs. 1,500,000. Tax rate 30%. How many units must be sold for a profit after tax of Rs. 1,050,000?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) 9,375 units
Explanation
Target PBT = 1,050,000 / 0.7 = 1,500,000. CM per unit = 800 - 480 = 320. Units = (1.5m Fixed + 1.5m PBT) / 320 = 9,375 units.
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