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Q 1 Sales are RS. 1,00,000, variable cost is
Rs. 70,000 and fixed cost is Rs. 15,000.
The P/V ratio will be
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Given : Sales are RS. 1,00,000
variable cost is Rs. 70,000
fixed cost is Rs. 15,000
To Find : The P/V ratio will be
Solution:
Sales are RS. 1,00,000
variable cost is Rs. 70,000
fixed cost is Rs. 15,000
Total cost = 70000 + 15000 = 85000
Profit = 100000 - 85000 = Rs 15000
P/V ratio = profit volume ratio
Contribution = Sales - variable cost
= 100000 - 70000
= 30000
P/V ratio = Contribution / Sales
= 30000/100000
= 3/10
or
P/V ratio = ( Fixed cost + Profit ) / Sales
= (15000 + 15000)/100000
= = 30000/100000
= 3/10
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