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
- 8 Answers
- 82405 Views
- Apollo, MBA, Techno Labs, I also Faced
- E-Mail Answers
Answer Posted / 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 |
Post New Answer View All Answers
outstanding expenses, prepaid or unexpired expenses
In what cases can Convertible bonds be considerred as derivatives?
If i have a company in India doing purchase from Shrilanka, If i buy in Shrilankan local currency and make the payments in Indian Currency At the end of year how shall i settle the difference Exchange money in Books of Accounts.
what do you mean by accounting?Explain the various concepts of accounting and the need for having accounting standards?
if we have credit 50 % rg23c part ii first and not credit next balance 50 % .when we have do?
What is the Assets & Liabilities?
What is the GDP growth?
What is money measurement concept
EXPAND___________NAC
what is corporate accounting?
How to dived the persons AOP, AJP, BODY OF INDIVIDUALS,HUF,COMPANY-NON RESIDENT, COMPANY RESIDENT LOCLA AUTHORITY,PARTNERSHIP FIRM(meaning)
Took goods from the shop for use at home. state whether the the following transcation is business transcation or non business transcation? with reson or explaination?
Expand-------ANTS
A specially designed interview book on interviews for accounting Jobs . Pl send your mail addresses for despatch
Dear Friends, Please help me with the below, I am new to the current company and newly accountant. My question is, In Balance sheet, Cash in Drawer is showing excess amount and I could not tally it with sales. Please guide me how do I need to tally CASH IN DRAWER? I don't want to reconcile. I only want to tally. Please help. Thanks in advance.
