Question

(B)Sales: Rs 1,00,000;profit Rs 10,000:variable cost Rs 70%.
Find out:(I) P/V Ratio (ii)fixed cost (iii)sales to earn a profit of Rs 40,000​

Answer 1

Answer:

1 = PV RATIO= 30%

2 = FIXED COST = 20000

3 = SALES VALUE FOR PROFIT RS40000 =   200000

Explanation:

1- PV RATIO = CONTRIBUTION / SALES * 100

CONTRIBUTION = SALES - VARRIABLE COST

CONTRIBUTION = 100000-70000 =30000

SO, PV RATIO= 30000 / 100000*100 = 30%

2- FIXED COST = CONTRIBUTION - PROFIT

SO, FC= 30000 - 10000 = 20000

3- SALES TO EARN PROFIT RS 40000

 = (FIXED COST+ DESIRED PROFIT) / CONTRIBUTION * SALES

= (20000+40000) / 30000 * 100000

= (60000 / 30000) * 100000

= 2 * 100000 = 200000