From the following data calculate (i) P/V Ratio (ii) Profit
when sales are Rs.20,000 and (iii) the new Break-Even
Point, if the selling price is reduced by 20%
Fixed expenses Rs. 4,000
Break-Even-Pont Rs. 10,000
Answers were Sorted based on User's Feedback
Answer / sandeep kumar thakur
Herez the correct answers/solutions
1) P/V ratio
F.C (Fixed expenses/cost). = 4,000
B.E.P = 10,000
B.E.P =. F.C / P/V ratio × 100
10000 = 4000/pV ratio × 100
Pv ratio = 4000/10000 × 100
Pv ratio = 40% (solved)
2). Profit when sales are 20000
P/v ratio = F.c + profit / sales × 100
40 = 4000 + profit /20000 × 100
20000 × 40 = 4000+ profit × 100
8,00000/100 = 4000 + profit
8000 = 4000 + profit
Or, profit = 8000-4000 = 4000 (solved)
Now part 3 = New BEP if selling price reduced by 20%
{
For this one no one gave correct answer
Herez the trick
As we know , sales = F.c + V.C + profit(or - loss)
(F.c fixed cost , VC variable cost )
Therefore Selling price above was 20000 and profit was 4000 (solved in part 2 and FC was 4000)... Therefore
20000 = 4000 + V.c + 4000
I.e V.c = 12000 }
So now. We have
Fc = 4000
VC = 12000
SALES = 16000 (i.e 20% reduced as asked in part 3 )
Now new B.E.P = F.C / Sales - V.C ×. Sales
{ there r more than one formulaes to calculate BEP)
New B.E.P = 4000/16000- 12000× 16000
New B.E.P = 4000/ 4000 × 16000
New B.E.P = 1 × 16000
So when sales r 16000 B.E.P will be on 16000.
16000 is a point of no profit no loss.
Veridication :-
Sales =. FC + VC + profit (or - loss)
16000 = 4000 + 12000 + 0
16000 = 16000
Therefore its correct.
Is This Answer Correct ? | 86 Yes | 15 No |
Answer / mohit duvedi
given:-
sales=20000
FC=4000
BEP=10000
BEP=FC/PV RATIO
:. PV RATIO= FC/BEP
PV RATIO= 4000/10000 *100
(1)PVR=40% ANS
DESIRED PROFIT= (SALES*PVR)-FC
DP= (20000*40%)-4000
DP=8000-4000=4000
(2) DESIRED PROFIT=4000
NEW SELLING PRICE=20000-20%=16000
NEW BEP= FC/N PVR
N PVR=FC+PROFIT/NEW SELLING PRICE*100
=4000+4000/16000*100
=8000/16000*100
=50%
NEW BEP=4000/50%
=8000
(3) NEW BREAK EVEN POINT=8000 ANS
Is This Answer Correct ? | 36 Yes | 31 No |
Answer / h. vabeizawzi
PVR=SALES-VARIABLE COST/SALES*100
=20000-12000/20000*100
=8000/20000*100
=40%
OR
PVR=FC+PROFIT/SALES*100
=4000+4000/20000*100
=8000/20000*100
=40%
OR
PVR=CONTRIBUTION/SALES*100
=8000/20000*100=40%
+----------------------------------------------------------+
Is This Answer Correct ? | 9 Yes | 6 No |
Answer / arvind rana (behdala) una,hp
GIVEN==> sales=20000, FC=4000, BEP=10000
ANSWER==>(1)PVR=40% (2)PROFIT=4000 (3)NEW BEP=8000
BEP=FC/PV RATIO
:. PV RATIO= FC/BEP
PV RATIO= 4000/10000 *100
(1)PVR=40% ANS
varification of ANS(1):-
PVR=SALES-VARIABLE COST/SALES*100
=20000-12000/20000*100
=8000/20000*100
=40%
OR
PVR=FC+PROFIT/SALES*100
=4000+4000/20000*100
=8000/20000*100
=40%
OR
PVR=CONTRIBUTION/SALES*100
=8000/20000*100=40%
+----------------------------------------------------------+
DESIRED PROFIT= (SALES*PVR)-FC
DP= (20000*40%)-4000
DP=8000-4000=4000
(2) DESIRED PROFIT=4000
VARIFICATION OF ANS(2):-
VC=(1-PVR)SALES =(1-40%)SALES=60%(20000)=12000
SALES=FC+VC+P
20000=4000+12000+P
P=20000-16000=4000
+----------------------------------------------------------+
NEW SELLING PRICE=20000-20%=16000
NEW BEP= FC/N PVR
N PVR=FC+PROFIT/NEW SELLING PRICE*100
=4000+4000/16000*100
=8000/16000*100
=50%
NEW BEP=4000/50%
=8000
(3) NEW BREAK EVEN POINT=8000 ANS
VARIFICATION OF ANS(3):-
BREAK EVEN POINT IS A SITUATION WHERE TOTAL COST=TOTAL
SALES AND CONTRIBUTION=FIXED COST
REDUCTION IN SALES ONLY EFFECTS ON VARIABLE COST.
SO:- %AGE CHANGE IN SALES(-20%) = CHANGE IN BEP
O
LD BEP=10000 (GIVEN)
NEW BEP=10000-(20%)10000-2000=8000.
+---------------------------------------------------------+
Is This Answer Correct ? | 12 Yes | 16 No |
Answer / syed
P/V Ratio Contribution/Sales*100
Contribution Sales - Variable Cost
BEP = Fixed Cost/Contribution*Sales
10000 = 4000/Variable cost *20000
Variable cost 80000000/10000
Variable cost 8000
Contribution 20000-8000
Contribution 12000
P/V Ratio 12000/20000*100
P/V Ratio 60
Sales 20000
V.cost -8000
Contributin 12000
F.cost -4000
Profit 8000
IF selling price reduced by 20%, New BEP
Sales 20000*20/100 16000
BEP 4000/12000*16000
5333.333333
I want to know the ANSWER IS CORRECT / NOT. If not please
produce the correct one
Thanks
syed.
Is This Answer Correct ? | 49 Yes | 54 No |
Answer / sunita
P/V Ratio Contribution/Sales*100
Contribution Sales - Variable Cost
BEP = Fixed Cost/Contribution*Sales
10000 = 4000/Variable cost *20000
Variable cost 80000000/10000
Variable cost 8000
Contribution 20000-8000
Contribution 12000
P/V Ratio 12000/20000*100
P/V Ratio 60
Sales 20000
V.cost -8000
Contributin 12000
F.cost -4000
Profit 8000
IF selling price reduced by 20%, New BEP
Sales 20000*20/100 16000
BEP 4000/12000*16000
5333.333333
Is This Answer Correct ? | 19 Yes | 25 No |
Answer / g.kasi, asst.director
Correct answers are :-
1)pvr=40% 2)profit=4000 3)new bep=8000
4)contribution=8000 5)variable cost=12000
Syed in his calculation, instead of putting contribution ,he used variable cost, hence he calculated variable cost as rs.8ooo, ( variable cost value and contribution value interchanged )
In answer 1 ) bep = f.C / contribution * sales
10000 = 4000 /8000 *20000
10000 = 10000
In answer 2 )new bep = f.C /c * new sales
8000 = 4000 / 8000 * 16000
8000 = 8000
Is This Answer Correct ? | 1 Yes | 7 No |
Answer / harsh sharda chattara,una,hp
IS ANS GIVEN BY SYED AND SUNIT IS WRONG ?
ANSWERS ARE:-
1)PVR=60% 2)PROFIT=8000 3)NEW BEP=5333.33
4)CONTRIBUTON=12000 5)VARIABLE COST=8000
IN ANS 1)BEP =Fixed Cost/Contribution*Sales
? 10000=4000/12000*20000
? 10000=/=6666.66
BUT
IN ANS 3)BEP =Fixed Cost/Contribution*Sales
5333.33=4000/12000*16000
5333.33=5333.33
DO U HAVE ANY ANSWER OR REASION PLEASE TELL ME.............
Is This Answer Correct ? | 7 Yes | 17 No |
Can anyone mail journal entries for me? my Mail id rukmini@live.in
What is the difference between horizontal balence sheet & vertical balence sheet explain in detail.
You are a science gradute, but why did you come in accounts field?
what are the different causes for discrepencybetween the balance of cash book and pass book
EXPAND______________PGDC
What goals do you have in your career
0 Answers Amdocs, GSK GlaxoSmithKline, IBPS, JPMorgan Chase,
what is a zip file
What is meant by the word Liquidation. Give examples
How many types of banking accounts? tell me about that
20 Answers Andhra Bank, Bank of Baroda, Canara Bank, Chartered Accountant, Indian Bank,
If someone knows about the test pattern of Junior executive accounts than please share.
0 Answers Pakistan Atomic Energy Commission PAEC,
What is contract accounting?
Expand--------SSS