Question

When sales are₹2,00,000, fixed costs ₹30,000, PV ratio 40%, the amount of
profit will be - .2,00,000, .30,000, PIV
40%
a) ₹50,000 b) ₹80,000 c) ₹12,000 d) ₹60000​

Answer 1

Answer:

b)80000

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Answer 2

The profit will be ₹50,000

Step-by-step Explanation:

Given: sales are₹2,00,000,

          fixed costs ₹30,000,

          PV ratio 40%.

To Find: The amount of profit.

Solution:

Definition of Contribution:

The contribution is the amount left from the sales after the deduction of variable cost from it, it shows how much sales is getting affected from the variable cost. It excludes the fixed cost, after deduction of fixed cost the actual profit comes.

PV ratio = Contribution/sales*100

40% = contribution/200000*100

Contribution = ₹80,000

Calculation of Profit:

Profit = contribution-fixed cost

         = ₹80,000- ₹30,000

         = ₹50,000.

Thus, the profit will be ₹50,000.