If the company has sales of Rs. 82.5 Lacs, variable cost Rs. 46.2 Lac, fixed cost Rs 6.6 lac. Find contribution and EBIT of firm.Options :36.3, 29.735,1220 ,4514,34
Question
If the company has sales of Rs. 82.5 Lacs, variable cost Rs. 46.2 Lac, fixed cost Rs 6.6 lac. Find contribution and EBIT of firm.Options :36.3, 29.735,1220 ,4514,34
Solution
To find the contribution and EBIT of the firm, we can use the following formulas:
Contribution = Sales - Variable Cost EBIT (Earnings Before Interest and Taxes) = Contribution - Fixed Cost
Given: Sales = Rs. 82.5 Lacs Variable Cost = Rs. 46.2 Lacs Fixed Cost = Rs. 6.6 Lacs
Step 1: Calculate the Contribution Contribution = Sales - Variable Cost Contribution = Rs. 82.5 Lacs - Rs. 46.2 Lacs Contribution = Rs. 36.3 Lacs
Step 2: Calculate the EBIT EBIT = Contribution - Fixed Cost EBIT = Rs. 36.3 Lacs - Rs. 6.6 Lacs EBIT = Rs. 29.7 Lacs
Therefore, the contribution of the firm is Rs. 36.3 Lacs and the EBIT is Rs. 29.7 Lacs.
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