Question

If contribution is ₹ 8,000 and fixed cost is ₹ 5,000 profit will be:​

Answer 1

Step-by-step explanation:

contribution to sales which signifies the percentage of contribution before considering the fixed cost.

P/V Ratio= Contribution/sales*100

Margin of safety is define as the sales over the break even sales.

Margin of Safety Ratio= Margin of Safety/Actual Sales*100

Profit ratio =Margin of Safety Ratio*P/V Ratio

=50%*20%

=10%.

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