Problem:
Alpha Company, which sells specially designed envelopes has been in the industry for almost then years. The company's profit and loss account for the month of December 2012 is given below:
Alpha Company
Profit and Loss Account for December 2012
€
Sales (21,500 units) 1720,000
Less: Variable Costs 967500
________
Contribution 752500
Less: Fixed Costs 780000
________
Net Loss 27500
Calculate the company's contribution margin ratio and its breakeven point in both units and value (round up to the nearest units).
Summary of question:
This question is basically belongs to Finance as well as it explains about a condition of a business which yields net loss. The breakeven point for this business in terms of units and sales has been computed in the solution.