Numerical - Calculate sales volume & shut down point of business

Q.  Rahul has an amount of Rs 3,00,000 which is invested in a business. He desires 15% return on his fund. It is known from the past cost data analysis that fixed costs are Rs 1,50,000 per annum and variable costs of operation are 60% of sales. Determine sales volume to get 15% return. Also tell shut down point of the business, if he would spend Rs 50,000 even if business has to be closed.
- Published on 19 Oct 15

a. Rs 2,50,000 and Rs 4,00,000
b. Rs 2,50,000 and Rs 4,87,500
c. Rs 4,87,500 and Rs 2,50,000
d. Rs 4,00,000 and Rs 2,00,000

ANSWER: Rs 4,87,500 and Rs 2,50,000

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