Question

The sales turnover and profit of a company during two years was as follows: Particulars Year...

The sales turnover and profit of a company during two years was as follows:

Particulars Year Sales Profit

2018 150,000 20,000

2019 170,000 25,000

Calculate p/v. ratio, Break-even point, sales required to earn a profit of Rs. 40,000, the profit made when sales are Rs. 250,000, Margin of safety at a profit of Rs. 50,000 and variable costs of the two periods;

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Answer #1

No Fixed cost information has been provided hence it is assumed that all costs are variable and Fixed costs are zero.

With this assumtion the various desired parameters are calculated hereunder :

Formula Table

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