The document is a case study submitted by Sagar Sharma analyzing the cost volume profit of MRF Company Ltd. in 2008. MRF is one of India's largest tyre makers. The case provides annual sales, variable costs, fixed costs for MRF in 2008. It then calculates the profit or loss at sales volumes of 80,000, 100,000 and 120,000 rupees. The solution determines the units sold and profit/loss for each sales volume. It finds a loss of 12,000 rupees at 80,000 rupees in sales but profits of 20,000 and 28,000 rupees at 100,000 and 120,000 rupees in sales respectively. A graph

1. Case Study
Submitted On
“Cost Volume Profit Analysis”
By
Sagar Sharma
(BBA 3rd Year)
106/10 civil lines,
Ajmer 305001
Website: www.dezyneecole.com

2. Cost Volume Profit Analysis
About MRF
An enterprise that started as a toy balloon maker in 1946 in South India quickly grew
to become one of India's biggest and respected companies. Renowned for product
superiority and innovation, MRF continues to be the leading tyre-maker in India.
Who We Are
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3. Cost Volume Profit Analysis
History& Achievement of The Company (1946-2008)
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4. Cost Volume Profit Analysis
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5. Cost Volume Profit Analysis
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6. Cost Volume Profit Analysis
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7. Cost Volume Profit Analysis
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8. Cost Volume Profit Analysis
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9. Cost Volume Profit Analysis
Manufacturing Unit
Case: -A MRF company Ltd. sales tyres in an annual year (2008) particulars are as follows:
Sales
1,00,000
Variable Cost
60,000
Fixed Cost
20,000
The company also show the profit at sales volume of 80,000; Rs. 1,00,000 and Rs.
1,20,000.
Determine the company profit on sales as given above and determine the company loss
area; profit area on 1,00,000 and profit area of 1,20,000 in terms of amount.
Draw a graph of the company’s situation and comment on the profit zone of the company
in the year (2008).
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10. Cost Volume Profit Analysis
Solution:Calculation of units:-
1. Sales unit on Rs. 80,000 Sales =
ଶ଴,଴଴଴
( ଵ,଴଴,଴଴଴x 80,000)= 16,000 Units
2. Sales unit on Rs. 1,00,000 Sales =
3. Sales unit on Rs. 1,20,000 Sales =
ଶ଴,଴଴଴
( ଵ,଴଴,଴଴଴x 1,00,000)= 20,000 units
ଶ଴,଴଴଴
( ଵ,଴଴,଴଴଴x 1,20,000)= 24,000 units
Calculation of Profit :1. Profit on Rs. 80,000 Sales :- (S x P/V Ratio) – F
= (80,000 x 40%) – 20,000
= (-)12,000 Rs
2. Profit on Rs. 1,00,000 Sales :- (S x P/V Ratio) – F
= (1,00,000 x 40%) – 20,000
= 20,000 Rs.
3. Profit on Rs. 1,20,000 Sales :- (S x P/V Ratio) – F
= (1,00,000 x 40%) – 20,000
= 28,000 Rs.
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11. Cost Volume Profit Analysis
(1) At Sales 80,000 Rs.
The Company suffers with 12,000 Rs. Loss when it sales 16,000 units, If the company change
the sales units and produce 30,000 units for the sale it will earn the Profit of 48,000 Rs.
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12. Cost Volume Profit Analysis
(2) At Sales 1,00,000 Rs.
Company sales 20,000 units and earn Profit of 20,000 Rs. This is the similar stage of cost and
revenue of the company. If the company change the sales units and produce 34,000 units for
the sale it will earn the Profit of 60,000 Rs.
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13. Cost Volume Profit Analysis
(3) At Sales 1,20,000Rs.
When the Company produces 24,000 units it earned profit of 28,000 Rs. If the company
produces 48,000 units for the sale it will earn the Profit of 72,000 Rs. This figure shows the
total units and revenue which helps to the company to earn desired profit.
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