Question

calculate the BEP and profit volume ratio from the following sales 1000000 variable cost 400000 fixed cost 400000​

Answer 1

Answer:

1 - BEP = 6,66,666.67

2 - PV RATIO = 60%

Explanation:

BEP = FIXED COST / PV RATIO

SO, PV RATIO = CONTRIBUTION / SALES * 100

CONTRIBUTION = SALES - VARRIABLE COST

                            = 1000000 - 400000 = 600000

SO, PV RATIO = 600000 / 1000000 * 100 = 60%

BEP = FIXED COST / PV RATIO

      = 400000/60%   OR 400000/ 0.6

      =6,66,666.67