This business/management problem is solved step by step below, with detailed explanations to help you understand the method and arrive at the correct answer.
ScanSolve AI Answer
Here are the calculations based on the provided trading results: i) P/V Ratio. Step 1: Calculate the change in profit and change in sales. Change in Profit = Profit (2016) - Profit (2017) = Rs. 10,000 - Rs. 4,000 = Rs. 6,000 Change in Sales = Sales (2016) - Sales (2017) = Rs. 200,000 - Rs. 180,000 = Rs. 20,000 Step 2: Apply the P/V Ratio formula. P/V Ratio = Change in ProfitChange in Sales × 100 P/V Ratio = (6,000)/(20,000) × 100 P/V Ratio = 0.3 × 100 = 30\% ii) Fixed cost. Step 1: Calculate the Contribution using sales and P/V Ratio for one year (e.g., 2016). Contribution (2016) = Sales (2016) × P/V Ratio Contribution (2016) = Rs. 200,000 × 0.30 = Rs. 60,000 Step 2: Calculate the Fixed Cost using the Contribution and Profit. Fixed Cost = Contribution - Profit Fixed Cost = Rs. 60,000 - Rs. 10,000 = Rs. 50,000 iii) Break Even Point. Step 1: Apply the Break Even Point formula using Fixed Cost and P/V Ratio. Break Even Point (in Rs.) = Fixed CostP/V Ratio Break Even Point (in Rs.) = (50,000)/(0.30) Break Even Point (in Rs.) = Rs. 166,666.67 Send me the next one 📸