Question

Sales are RS. 1,00,000, variable cost is Rs. 70,000 and fixed cost is Rs. 15,000. The P/V ratio will be

Answer 1

Answer:

Here's the ans hope it's helpful for you☺

Explanation:

Given : Sales are RS. 1,00,000 variable cost is Rs. 70,000 fixed cost is Rs. 15,000

To Find : The P/V ratio will be

Solution:

Sales are RS. 1,00,000

variable cost is Rs. 70,000 fixed cost is Rs. 15,000

Total cost = = 70000 + 15000 85000

Profit = 100000 - 85000 = Rs 15000

P/V ratio profit volume ratio =

Contribution = Sales - variable cost

= 100000 - 70000

= 30000 =

P/V ratio Contribution / Sales

= = 30000/100000

= = 3/10

#its Sayan✌

Answer 2

Answer:

The P/V ration for the given question is 3/10.

Explanation:

• Contribution/Sales is the P/V ratio.
• It is employed to gauge the company's profitability.
• The surplus of sales over variable costs is known as contribution.
• In essence, the P/V ratio is utilised to assess the level of contribution provided at various sales volumes.
• A high P/V ratio denotes strong profitability, meaning that even a little increase in volume would produce substantial profits without an increase in fixed costs.
• On the other hand, a low P/V ratio indicates low profitability, hence efforts should be made to raise the P/V ratio.

Given :

Sales are RS. 1,00,000

variable cost is Rs. 70,000

fixed cost is Rs. 15.000

To Find : the value of P/V ratio

Solution:

Sales are RS. 1.00.000

variable cost is Rs. 70.000

fixed cost is Rs. 15.000

Total cost = 70000 + 15000 = 85000

Therefore, Profit = 100000 - 85000 = Rs 15000

P/V ratio = profit volume ratio

Contribution = Sales - variable cost

= 100000 - 70000

= 30000

PV ratio = Contribution / Sales

= 30000/100000

= 3/10

Or

P/V ratio = (Fixed cost + Profit ) / Sales

= (15000 + 15000 /100000

= 30000/100000

= 3/10

Therefore, for the given question, according to our calculations, the P/V ratio is 3/10.

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