Question

sale of a product amounts to 200 units per month at rupees 10 per unit. Picsart overhead cost is rupees 400 per month and variable cost is rupees 6 per unit. There is a proposal to reduce prices by 10 % calculate present and future PV ratio​

Answer 1

Answer:

present p/v ratio

contribution=sales -variable =10-6=4

p/vratio =contribution/sales *100

4/10*100=40%

therefore if price is reduced

New sales 9

p/v ratio=3/9*100=33.333%