Question

W Ltd. produces and sells a product ‘Ferrum’. The company has a P/V ratio of 20%. The company incurs Rs.1,20,000 as fixed cost per annum and its present sales are Rs.90,000 per month. The fixed cost is likely to increase to Rs.1,35,000 and the variable cost is expected to increase by 5% for the next period. The percentage increase in selling price required to maintain the existing level of profit is

a) 4.00%

b) 5.00%

c) 5.39%

d) 5.50%

Answer 1

Answer:

C) 5.39%

Explanation:

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