The following data is related to a small manufacturing company fixed cost - Rs. 1,60,000 Variable cost - 60% of sales calculate pv ratio bep ratio sales required to earn a profit of Rs. 20,000 Profit at an estimated sales of Rs. 4,40,000 Margin of safety when sales are Rs. 80,000
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Answered by
5
Answer:
it was really very easy bro
Fixed cost is 30000/-Rs. PVR 50% , BEP= FIXED COST / PVR = BEP 30000/50%=60000/- Rs.
Answered by
1
Answer:(a) Variable cost ratio to sales = 60%
Contribution ratio = (100% – Variable cost ratio)
= (100% - 60%)
= 40%.
Profit Volume Ratio (P/V) = 40%
(b) Break-even Point = Fixed cost ÷ P/V Ratio
= Rs.1,60,000 ÷ 0.6
= Rs.2,66,667.
(c) Sales to earn profit of Rs.20,000:
= (Fixed cost + Desired Profit) ÷ P/V Ratio
= (Rs.1,60,000 + Rs.20,000) ÷ 0.6
= Rs.3,00,000
(d) Margin of safety when sales are Rs.8,00,000
= Actual sales – Break-even sales
= Rs.8,00,000 – Rs.2,66,667
= Rs.5,33,333.
Trust you have understood.
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