Good Morning Sir, In Q49: I had a doubt regarding the conclusion made in the solution regarding valid and invalid based on capacity levels.
Here, we calculate the Breakeven Point and Desired sales units at 2 range of capacity ie. Up-to 80% capacity(upto32,000 units) and 80-100% capacity. My doubt was when we are working at capacity range 80-100%, the break-even point has come 22,667 units which is valid according to me as it can be below 32,000(ie 80%capacity) as the remaining sales will be Margin of Safety. There is no compulsion that if we work at above 80% capacity, the BEP has to be above 32,000.
Could you please clarify whether the Valid/Invalid conclusion is correct or not? If correct, then please explain the logic.
Thank you Sir!
Now the question is that why in the sum beyound 80% it is written invalid?
Beyound beyound 80% jo breakeven 22667 aayaa… uspei toh utna fixed cost nahi legega na!
Break even point is FC/PV ratio—
So beyound 80% breakeven agar 22667 haaa then fixed cost toh 150000 lagega additional 20000 nahi lagega ! so Invalid
Any doubt feel free to ask!
Understood sir. Thank you so much!