Question

Calculate sales, if marginal cost is ₹ 4,800 and P/V Ratio 20%.
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Answer 1

calculate selling price if mariginal cost 2400 p/v ratio 20/

Answer 2

Answer:

Calculate sales, if marginal cost is ₹ 4,800 and P/V Ratio 20%.

Explanation:

• P/V ratio is the profit volume ratio.
• Profit volume ration indicates the relationship between sales and contribution and it is expressed in percentage.
• It is also called marginal ratio.
• Formula: P/V ratio=$\frac{contribution }{sales} *100$
• Here, contribution is the sales minus variable cost or to define it contribution is the excess of sales over variable cost or profit including fixed cost of the company.
• P/V ratio is used to measure the profitability of the company.
• Sales= $\frac{contribution}{P/V ratio} *100$
• Sales= $\frac{4800}{20} *100$
• Sales= 24000 Rs.
• Hence, total sales volume is Rs. 24000. It implies that variable cost is 20% of the total sales.

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