Question

Sales RS 100000 profit RS 10000 variable cost 70% calculate pv ratio fixed cost sales required to earn a profit of RS 40000?

Answer 1

Explanation:

variable cost 70% of sales i.e 70000

contribution = sales - variable cost

i.e 100000 - 70000

C = 30000

p/v ratio = C/ sales*100 = 30000/100000*100 = 30%

desired profit = fc+dp/pv ratio = 20000+40000/0.3 = 60000/0.3 = ₹ 200000/-

contribution = fc + profit -> i.e fc = C - PROFIT

= 30000 - 10000 = 20000

Answer 2

Answer:

Pv ratio = 30%

Fc = 20,000

C)= 2,00,000

Explanation:

as we know

sales

-vc

=contribution

-fc

= profit

100000

-70000

=30000

-20000

=10000

pv = contribution/sales×100

sales= Fc + desired profit/ Pv ratio