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    Question

    ARP is a manufacturing concern. They come to you with following the details:

    Variable Cost: ₹ 50,000

    Fixed Cost: ₹ 20,000

    Selling Price: ₹ 80,000

    They want to know what the profit/loss status is. Given Fixed Cost is ₹ 40,000.

    A Profit Correct Answer Incorrect Answer
    B No Profit No Loss Correct Answer Incorrect Answer
    C Cannot be determined Correct Answer Incorrect Answer
    D Loss Correct Answer Incorrect Answer

    Solution

    If the fixed cost is 40,000 then ARP is a manufacturing concern will incur a loss: Selling price: 80,000 Variable cost: 50,000 Fixed Cost: 40,000 Loss 10,000

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