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when contribution is negative, then how to calculate PV ratio?
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lets understand with this exemple
Sales = 10, Variable cost= 3, Fixed cost = 3,
Sales = 10
less Variabled cost = 3
C0ntribution (10-3) = 7
less fixed cost = 3
profit = 4
Contriburion only negetive when Variable cost is more then
sales.
| Is This Answer Correct ? | 10 Yes | 3 No |
Answer / sunil kumar
For ex .sales 8 variable 3fixed cost 2
Contribution : sales -variable cost
8 - 3
c; 5
P :sales-fc+vc
P=8-3+2
P= 3
Then pv%
Pv%= fc +p÷s¤100
Pv%= 2+3÷8¤100
Pv%= 62.5
| Is This Answer Correct ? | 1 Yes | 1 No |
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