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The date below relate to a company sales. Rs150000 Fixed cost. Rs 45000 profit. Rs15000 Calculate 1.P/V Ratio at present 2.P/V Ratio if selling price is increased by 10% 3.P/V ratio if selling price is decreased by 20%?
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The date below relate to a company sales. Rs150000 Fixed cost. Rs 4500...
1. P/V Ratio at present:
The Profit-Volume (P/V) ratio is a measure of the relationship between the contribution margin and sales revenue. It indicates the percentage of each unit sale that contributes to profit after covering fixed costs.
To calculate the P/V ratio, we use the formula:
P/V Ratio = (Contribution / Sales) × 100
Given information:
Fixed cost = Rs150,000
Profit = Rs45,000
Sales = Rs150,000 + Rs45,000 = Rs195,000 (Profit + Fixed cost)
Contribution = Sales - Variable cost
Let's assume the variable cost is V.
Contribution = Rs195,000 - V
P/V Ratio = (Contribution / Sales) × 100
P/V Ratio = ((Rs195,000 - V) / Rs195,000) × 100
2. P/V Ratio if selling price is increased by 10%:
If the selling price is increased by 10%, the new selling price would be:
New Selling Price = Selling Price + (Selling Price × Increase percentage)
New Selling Price = Rs150,000 + (Rs150,000 × 0.10) = Rs165,000
Given information:
Fixed cost = Rs150,000
Profit = Rs45,000
Sales = Rs165,000 + Rs45,000 = Rs210,000 (Profit + Fixed cost)
Contribution = Sales - Variable cost
Let's assume the variable cost is V.
Contribution = Rs210,000 - V
P/V Ratio = (Contribution / Sales) × 100
P/V Ratio = ((Rs210,000 - V) / Rs210,000) × 100
3. P/V ratio if selling price is decreased by 20%:
If the selling price is decreased by 20%, the new selling price would be:
New Selling Price = Selling Price - (Selling Price × Decrease percentage)
New Selling Price = Rs150,000 - (Rs150,000 × 0.20) = Rs120,000
Given information:
Fixed cost = Rs150,000
Profit = Rs45,000
Sales = Rs120,000 + Rs45,000 = Rs165,000 (Profit + Fixed cost)
Contribution = Sales - Variable cost
Let's assume the variable cost is V.
Contribution = Rs165,000 - V
P/V Ratio = (Contribution / Sales) × 100
P/V Ratio = ((Rs165,000 - V) / Rs165,000) × 100
Explanation:
- The P/V ratio helps in understanding the profitability and sensitivity of a company's sales. It shows how each unit sale contributes to profit after covering fixed costs.
- In the given scenario, we calculated the P/V ratio at present, assuming a fixed cost of Rs150,000 and a profit of Rs45,000. By substituting these values into the formula, we can find the P/V ratio.
- If the selling price is increased by 10%, we calculate the P/V ratio using the new selling price of Rs165,000 and the same fixed cost and profit.
- On the other hand, if the selling price is decreased by 20%, we calculate the P/V ratio using the new selling price of Rs120,000 and the
The Profit-Volume (P/V) ratio is a measure of the relationship between the contribution margin and sales revenue. It indicates the percentage of each unit sale that contributes to profit after covering fixed costs.
To calculate the P/V ratio, we use the formula:
P/V Ratio = (Contribution / Sales) × 100
Given information:
Fixed cost = Rs150,000
Profit = Rs45,000
Sales = Rs150,000 + Rs45,000 = Rs195,000 (Profit + Fixed cost)
Contribution = Sales - Variable cost
Let's assume the variable cost is V.
Contribution = Rs195,000 - V
P/V Ratio = (Contribution / Sales) × 100
P/V Ratio = ((Rs195,000 - V) / Rs195,000) × 100
2. P/V Ratio if selling price is increased by 10%:
If the selling price is increased by 10%, the new selling price would be:
New Selling Price = Selling Price + (Selling Price × Increase percentage)
New Selling Price = Rs150,000 + (Rs150,000 × 0.10) = Rs165,000
Given information:
Fixed cost = Rs150,000
Profit = Rs45,000
Sales = Rs165,000 + Rs45,000 = Rs210,000 (Profit + Fixed cost)
Contribution = Sales - Variable cost
Let's assume the variable cost is V.
Contribution = Rs210,000 - V
P/V Ratio = (Contribution / Sales) × 100
P/V Ratio = ((Rs210,000 - V) / Rs210,000) × 100
3. P/V ratio if selling price is decreased by 20%:
If the selling price is decreased by 20%, the new selling price would be:
New Selling Price = Selling Price - (Selling Price × Decrease percentage)
New Selling Price = Rs150,000 - (Rs150,000 × 0.20) = Rs120,000
Given information:
Fixed cost = Rs150,000
Profit = Rs45,000
Sales = Rs120,000 + Rs45,000 = Rs165,000 (Profit + Fixed cost)
Contribution = Sales - Variable cost
Let's assume the variable cost is V.
Contribution = Rs165,000 - V
P/V Ratio = (Contribution / Sales) × 100
P/V Ratio = ((Rs165,000 - V) / Rs165,000) × 100
Explanation:
- The P/V ratio helps in understanding the profitability and sensitivity of a company's sales. It shows how each unit sale contributes to profit after covering fixed costs.
- In the given scenario, we calculated the P/V ratio at present, assuming a fixed cost of Rs150,000 and a profit of Rs45,000. By substituting these values into the formula, we can find the P/V ratio.
- If the selling price is increased by 10%, we calculate the P/V ratio using the new selling price of Rs165,000 and the same fixed cost and profit.
- On the other hand, if the selling price is decreased by 20%, we calculate the P/V ratio using the new selling price of Rs120,000 and the
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The date below relate to a company sales. Rs150000 Fixed cost. Rs 45000 profit. Rs15000 Calculate 1.P/V Ratio at present 2.P/V Ratio if selling price is increased by 10% 3.P/V ratio if selling price is decreased by 20%? for B Com 2024 is part of B Com preparation. The Question and answers have been prepared according to the B Com exam syllabus. Information about The date below relate to a company sales. Rs150000 Fixed cost. Rs 45000 profit. Rs15000 Calculate 1.P/V Ratio at present 2.P/V Ratio if selling price is increased by 10% 3.P/V ratio if selling price is decreased by 20%? covers all topics & solutions for B Com 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for The date below relate to a company sales. Rs150000 Fixed cost. Rs 45000 profit. Rs15000 Calculate 1.P/V Ratio at present 2.P/V Ratio if selling price is increased by 10% 3.P/V ratio if selling price is decreased by 20%?.
The date below relate to a company sales. Rs150000 Fixed cost. Rs 45000 profit. Rs15000 Calculate 1.P/V Ratio at present 2.P/V Ratio if selling price is increased by 10% 3.P/V ratio if selling price is decreased by 20%? for B Com 2024 is part of B Com preparation. The Question and answers have been prepared according to the B Com exam syllabus. Information about The date below relate to a company sales. Rs150000 Fixed cost. Rs 45000 profit. Rs15000 Calculate 1.P/V Ratio at present 2.P/V Ratio if selling price is increased by 10% 3.P/V ratio if selling price is decreased by 20%? covers all topics & solutions for B Com 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for The date below relate to a company sales. Rs150000 Fixed cost. Rs 45000 profit. Rs15000 Calculate 1.P/V Ratio at present 2.P/V Ratio if selling price is increased by 10% 3.P/V ratio if selling price is decreased by 20%?.
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