A company’s sales could decrease by 50% before it starts incurring losses. And, for every Re. 1 of sales, it can contribute 40 paise towards fixed…

CA Intermediate · Cost and Management Accounting · RTP · September 2025
A company’s sales could decrease by 50% before it starts incurring losses. And, for every Re. 1 of sales, it can contribute 40 paise towards fixed costs and generating profit. For the current year, the company’s fixed cost amounts to 5,00,000. CALCULATE the Projected sales.
(A) ₹ 10,00,000
(B) ₹ 12,50,000
(C) ₹ 20,83,333
(D) ₹ 25,00,000

Suggested Answer and Working Notes:

Correct Answer: Option (D)

₹ 25,00,000

Topics: Marginal Costing

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