Question

You are required to compute P/V Ratio, B.E.P and Margin of Safety from the following data : Sales (1,00,000 units) Rs.2,00,000 Variable cost Rs.80,000 Fixed cost Rs.40,000 3 Also evaluate the effect of (a) 20% increase in variable costs and (b) 20% increase in quantity sold on the above mentioned three measur

Answer 1

Explanation:

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Answer 2

Cost Accounting

Explanation:

Definition of Cost accounting

It is "a systematic set of procedures for recording and reporting measurements of the cost of manufacturing goods and performing services in the aggregate and in detail".

The formula of p/v ratio

P/V ratio =contribution x100/sales (*Contribution means the difference between the sale price and variable cost).

The formula of Margin of Safety

Current sales minus the breakeven point, divided by current sales.