Question

If Margin of Safety is Rs 100000 and Profit/Volume (P/V Ratio) is 20% the profit of the business is ​

Answer 1

Answer:

1000 may be please correct me if am wrong

Answer 2

Given:

The margin of safety=Rs.1,00,000

P/V ratio=20%

To find:

The amount of profit

Solution:

The required profit is Rs.20,000.

We can calculate the required amount by multiplying the given ratio and the margin of safety.

We know that the P/V ratio=Profit/Margin of safety.

Using the values,

20%=Profit/1,00,000

20/100=Profit/1,00,000

1/5×1,00,000=Profit

1,00,000/5=Profit

20,000=Profit

Therefore, the required profit is Rs.20,000.