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 / 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 |
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