Sales = Rs.100000, variable cost = Rs.50000, Fixed cost = Rs. 30000. calculated P V Ratio
Answers
Explanation:
Given :
Sales = Rs.1,00,000, variable cost = Rs.50,000, Fixed cost = Rs. 30000.
P/V ratio :
P/V ratio = Contribution/ Sales × 100
=> 1,00,000 - 50,000 = 50,000
P/V ratio = Contribution/ Sales × 100
= 50,000/1,00,000 × 100
= 50%
Therefore, P/V ratio = 50%
Given:
Sales=Rs.1,00,000
Variable cost=Rs.50,000
Fixed cost=Rs.30,000
To find:
The P/V ratio
Solution:
The P/V ratio is 50%.
We can find the ratio by following the steps given below-
We know that the P/V ratio is obtained by dividing the amount of contribution by the sales of the business and multiplying by 100.
The P/V ratio=(Contribution/Sales)×100
We will calculate the amount of contribution by subtracting the variable costs from the sales of the business.
Contribution=Sales- Variable cost
On putting the values,
Contribution=1,00,000-50,000
=Rs.50,000
The fixed cost given is irrelevant here and will not be used.
The P/V ratio=(50,000/1,00,000)×100
=1/2×100
=50%
Therefore, the P/V ratio is 50%.