Question

A company has Sales of Rs 8,00,000, PV Ratio is 20% and Fixed Cost is Rs 60,000, the profit will be______

a)₹1,00,000

b)₹80,000

c)₹50,000

d)₹20,000​

Answer 1

Explanation:

A company has Sales of Rs 8,00,000,

PV Ratio is 20%

Fixed Cost is Rs 60,000

The profit = ??

Profit = Contribution - Fixed cost

Or

Fixed Cost = sales × P/V Ratio - Profit

=> 60,000 = 8,00,000 ×0.2 - Profit

=> 60,000 = 1,60,000 - Profit

=> Profit = 1,60,000 - 60,000

Profit = ₹1,00,000

Hence, Option a). ₹1,00,000

Profit = ₹1,00,000

Answer 2

Answer:

Option a). ₹ 1,00,000

The profit will be Rs. 1,00,000.

Explanation:

Given :

• Sales = Rs 8,00,000
• P/V Ratio = 20%
• Fixed Cost = Rs 60,000

To find :

• The Profit

Solution :

★ Profit = Contribution - Fixed Cost

Contribution = Sales × P/V Ratio

⇒ 8,00,000 × 20%

⇒ 8,00,000 × 20/100

⇒ 8,00,000 × 0.2

⇒ 1,60,000

Contribution = Rs. 1,60,000

★ Profit = Contribution - Fixed Cost

⇒ 1,60,000 - 60,000

⇒ 1,00,000

Profit = ₹ 1,00,000

Therefore, the profit will be Rs. 1,00,000.