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 / 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 |
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