Question

Numerical
1) The contribution to sales ratio of a company is 20% and profit is 64,500. If the total sales of the
company are 7,80,000, the fixed cost is
(a) Rs 1,56,000
(b) Rs 1,21,500
(c) Rs 1,05,600
(d) Rs 91,500
(e) Rs 90,000
which includes fixed costs​

Answer 1

Answer:

(d). Rs 91,500

The fixed cost is Rs 91,500

Explanation:

Given :

P/V Ratio = 20 %

Profit = Rs 64,500

Total sale = Rs 7,80,000

To find :

The fixed cost

Solution :

P/V Ratio = Profit Volume Ratio

P/V Ratio = Contribution × 100 / sales

Fixed cost :

★ Method (I) :

Fixed cost = Total contribution - Profit

⇒ (7,80,000 × 20 / 100) - 64,500

Total contribution = Rs 1,56,000

⇒ 1,56,000 - 64,500

⇒ 91,500

★ Method (II) :

Fixed cost = Sales × P/V Ratio - profit

⇒ (7,80,000 × 0.2) - 64,500

⇒ 1,56,000 - 64,500

⇒ 91,500

Therefore,

(d). Rs 91,500

The fixed cost is Rs 91,500

Answer 2

Explanation:

Solution:

As per the question:

• The contribution to sales ratio of company is 20%

• profit is Rs. 64500/-

• Total sales of company are Rs. 780000/-

• The fixed cost is Rs. = ??

fixed cost = sales × p/v Ratio - profit

= (7,80,000 × 20/100) - 64,500

= (7,80,000 × 0.2) - 64,500

= 1,56,000 - 64,500

=  91,500

Fixed cost = Rs 91,500

Therefore, (option) (d). Rs 91,500

The fixed cost is Rs 91,500.