B Com Exam  >  B Com Questions  >  Year 2016&2017 sales 120000 & 140000 profit 8... Start Learning for Free
Year 2016&2017 sales 120000 & 140000 profit 8000& 13000 find out p/v ratio & break even point & profit when sales are 180000?
Most Upvoted Answer
Year 2016&2017 sales 120000 & 140000 profit 8000& 13000 find out p/v r...
Calculation of P/V Ratio:

P/V Ratio or Profit Volume Ratio is the ratio of contribution to sales. It is a measure of the contribution earned on each unit of sales. The formula for calculating the P/V ratio is as follows:

P/V Ratio = (Contribution/Sales) x 100

Given, Sales for 2016 = 120000
Profit for 2016 = 8000

Contribution = Sales - Variable Cost
Variable Cost = Sales - Contribution

Variable Cost for 2016 = 120000 - (120000 * 8000/120000) = 40000

Contribution for 2016 = Sales - Variable Cost = 120000 - 40000 = 80000

P/V Ratio for 2016 = (80000/120000) x 100 = 66.67%

Given, Sales for 2017 = 140000
Profit for 2017 = 13000

Contribution = Sales - Variable Cost
Variable Cost = Sales - Contribution

Variable Cost for 2017 = 140000 - (140000 * 13000/140000) = 11000

Contribution for 2017 = Sales - Variable Cost = 140000 - 11000 = 129000

P/V Ratio for 2017 = (129000/140000) x 100 = 92.14%

Calculation of Break-Even Point:

Break-Even Point or BEP is the point at which total cost is equal to total revenue. It is the point where the company neither earns a profit nor incurs a loss. The formula for calculating the BEP is as follows:

BEP = Fixed Cost / P/V Ratio

Given, Sales for 2016 = 120000
Profit for 2016 = 8000

Contribution for 2016 = 120000 - 40000 = 80000

P/V Ratio for 2016 = 66.67%

Fixed Cost for 2016 = Total Cost for 2016 - Variable Cost for 2016
Total Cost for 2016 = Sales for 2016 - Profit for 2016 = 120000 - 8000 = 112000
Fixed Cost for 2016 = 112000 - 40000 = 72000

BEP for 2016 = 72000 / 66.67% = 108000

Given, Sales for 2017 = 140000
Profit for 2017 = 13000

Contribution for 2017 = 140000 - 11000 = 129000

P/V Ratio for 2017 = 92.14%

Fixed Cost for 2017 = Total Cost for 2017 - Variable Cost for 2017
Total Cost for 2017 = Sales for 2017 - Profit for 2017 = 140000 - 13000 = 127000
Fixed Cost for 2017 = 127000 - 11000 = 116000

BEP for 2017 = 116000 / 92.14% = 126000

Calculation of Profit when Sales are 180000:

To calculate the profit when sales are 180000, we need to first calculate the contribution and then subtract the total cost from it.

Given, Sales = 180000

Contribution = Sales - Variable Cost
Variable Cost
Explore Courses for B Com exam
Year 2016&2017 sales 120000 & 140000 profit 8000& 13000 find out p/v ratio & break even point & profit when sales are 180000?
Question Description
Year 2016&2017 sales 120000 & 140000 profit 8000& 13000 find out p/v ratio & break even point & profit when sales are 180000? for B Com 2025 is part of B Com preparation. The Question and answers have been prepared according to the B Com exam syllabus. Information about Year 2016&2017 sales 120000 & 140000 profit 8000& 13000 find out p/v ratio & break even point & profit when sales are 180000? covers all topics & solutions for B Com 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Year 2016&2017 sales 120000 & 140000 profit 8000& 13000 find out p/v ratio & break even point & profit when sales are 180000?.
Solutions for Year 2016&2017 sales 120000 & 140000 profit 8000& 13000 find out p/v ratio & break even point & profit when sales are 180000? in English & in Hindi are available as part of our courses for B Com. Download more important topics, notes, lectures and mock test series for B Com Exam by signing up for free.
Here you can find the meaning of Year 2016&2017 sales 120000 & 140000 profit 8000& 13000 find out p/v ratio & break even point & profit when sales are 180000? defined & explained in the simplest way possible. Besides giving the explanation of Year 2016&2017 sales 120000 & 140000 profit 8000& 13000 find out p/v ratio & break even point & profit when sales are 180000?, a detailed solution for Year 2016&2017 sales 120000 & 140000 profit 8000& 13000 find out p/v ratio & break even point & profit when sales are 180000? has been provided alongside types of Year 2016&2017 sales 120000 & 140000 profit 8000& 13000 find out p/v ratio & break even point & profit when sales are 180000? theory, EduRev gives you an ample number of questions to practice Year 2016&2017 sales 120000 & 140000 profit 8000& 13000 find out p/v ratio & break even point & profit when sales are 180000? tests, examples and also practice B Com tests.
Explore Courses for B Com exam
Signup for Free!
Signup to see your scores go up within 7 days! Learn & Practice with 1000+ FREE Notes, Videos & Tests.
10M+ students study on EduRev