Question

the sales of a company for 2 different periods are 4000 units & 7000units. the profits are 80000& 170000respectively assume selling price is 100 per unit calculate p/v ratio and fixed cost and break even point​

Answer 1

Answer:

Explanation:

Let the contribution (ie) sales per unit - variable cost per unit = x;

Fixed cost = y

Then for the first period

4000x - y = 80000 and for the second period

7000x - y = 170000

solving the above we get,

3000x = 90000

x = 90000/3000 = 30 = contribution per unit

so Pv ratio = contribution / sales * 100 = 30/100 * 100 = 30%

Fixed cost

4000x - y = 80000 (we know x = 30) so

(4000 *30) - y = 80000

120000 - y = 80000

y = 40000 = Fixed Cost

BEP = Fixed cost/contribution per Unit = 40000/30 = 1333.33

or 1333 units