Question

Sales = Rs.100000, variable cost = Rs.50000, Fixed cost = Rs. 30000. calculated P V Ratio

Answer 1

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%

Answer 2

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%.