Question

if sales are 500000 variable cost are 200000 and fixed cost 240000 the p/v ratio will be

Answer 1

Answer:

60%

Explanation:

PV ratio = Contribution / Sales

{(500,000 - 200,000) / 500,000 } x 100

60%

Answer 2

The P.V. ratio will be 60%.

Given in the question that sales for the years is ₹5,00,000.

The variable cost is ₹2,00,000.

And, the fixed cost is ₹2,40,000

First we will calculate contribution:-

                     sales = 5,00,000

less: Variable cost = (2,00,000)

 = Contribution = 3,00,000

less: Fixed cost = (2,40,000)

= Profit = ₹60,000

Now, to calculate P.V. ratio:-

= (contribution/sales) * 100

= (3,00,000/5,00,000) * 100

= 60%