The following information has been furnished by the management accountant of CMC Limited: Margin of Safety 5600 units Break even sales 2400 units…

(b) Working Notes: Total Sales Units = Margin of Safety (Units) + Break-even Sales (Units) = 5,600 + 2,400 = 8,000 units Selling Price per Unit = Margin of Safety (MoS in Value) / Margin of Safety (Units) = 9,80,000 / 5,600 = 175 per unit Total Sales Value = Total Units × Selling Price = 8,000 × ₹ 175 = 14,00,000 (i) Profit = Total Sales - Total Cost = 14,00,000 - 11,94,200 = 2,05,800 (ii) Profit Volume (P/V) Ratio = Profit / Margin of Safety (Value) × 100 = (₹ 2,05,800 /9,80,000) × 100 = 21% (iii) Break-even Sales Value = Break-even Units × Selling Price = 2,400 units × ₹ 175 = 4,20,000 Alternatively, = Total Sales × [100 – Margin of Safety %] = 14,00,000 × 0.30 = 4,20,000 (iv) Fixed Cost = Break-even Sales Value × P/V Ratio = 4,20,000 × 21% = 88,200