Period I :- Sales= Rs 15000. Profit= Rs 400. Period II :- Sales= Rs 19000. Profit= Rs 1150. Calculate : a) P/V ratio. b) Profit when sales are Rs 12000. Cc) Sales required to earn a profit of Rs 2000. d) Margin of safety in period II. e) variable cost in period I.
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Answer / p.venketeswara
(a)P/V ratio=change in profit /change in sales*100. Now the following is the answer:-1150-400/19000-15000=750/4000*100=18.75%.(b) profit when sales are rupees 12000 the answer is (163) it is loss.but before calculating the above answer we should find out the fixed cost amount here fixed cost is 2412.50(approximately) 2413. fixed cost formula is sales *P/V ratio-profit.(c) sales required to earn profit of Rs 2000. sales is Rs 23536.(d) margin of sa fety=total sales-break even sales .so answer is Rs 6130. (e) variable cost for the period 1 is Rs 12187.
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