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
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Answer Posted / 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 |
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