Solution:
Given data:
Year 2016
Sales = 120000
Profit = 8000

Year 2017
Sales = 140000
Profit = 13000

1) Calculation of P/V Ratio:
P/V Ratio = Contribution/Sales * 100
Contribution = Sales - Variable Cost

Year 2016:
Contribution = 120000 - X (Variable Cost)
Profit = 8000
Therefore, Fixed Cost = 72000 (Profit + Variable Cost)
Contribution = 120000 - X
P/V Ratio = (120000 - X)/120000 * 100
8000 = (120000 - X)/120000 * 100
X = 40000
Contribution = 80000
P/V Ratio = 80000/120000 * 100 = 66.67%

Year 2017:
Contribution = 140000 - Y (Variable Cost)
Profit = 13000
Therefore, Fixed Cost = 107000 (Profit + Variable Cost)
Contribution = 140000 - Y
P/V Ratio = (140000 - Y)/140000 * 100
13000 = (140000 - Y)/140000 * 100
Y = 101000
Contribution = 39000
P/V Ratio = 39000/140000 * 100 = 27.86%

2) Calculation of Break Even Point:
Break Even Point (BEP) = Fixed Cost/P/V Ratio

Year 2016:
BEP = 72000/66.67% = 108000

Year 2017:
BEP = 107000/27.86% = 384507.17

3) Calculation of Profit when Sales are 180000:
Profit = (P/V Ratio/100) * Sales - Fixed Cost

Year 2016:
Profit = (66.67/100) * 180000 - 72000 = 25200

Year 2017:
Profit = (27.86/100) * 180000 - 107000 = -10220

4) Calculation of Margin of Safety in Year 2017:
Margin of Safety = Actual Sales - Break Even Sales
Break Even Sales = Fixed Cost/P/V Ratio * 100

Year 2017:
Break Even Sales = 107000/27.86% = 384507.17
Margin of Safety = 140000 - 384507.17 = -244507.17

Explanation:
- P/V Ratio is the ratio of Contribution to Sales that indicates how much profit can be earned on each unit of sales.
- Break Even Point is the point where total cost equals total revenue and no profit or loss is made.
- Profit can be calculated by using the formula of Profit = (P/V Ratio/100) * Sales - Fixed Cost.
- Margin of Safety indicates the extent to which sales can fall before the company starts making losses. If Margin of Safety is negative, it means that the company is already making losses.