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Year 2016&2017 sales 120000 & 140000 profit 8000& 13000 find out p/v ratio & break even point & profit when sales are 180000?
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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
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
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Year 2016&2017 sales 120000 & 140000 profit 8000& 13000 find out p/v ratio & break even point & profit when sales are 180000?
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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?.
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?.
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