A company has fixed cost of Rs.90,000, sales Rs.300,000 and profit of Rs.60,000. Their P/V ratio will be:
The P/V ratio is 50%. Contribution equals fixed cost plus profit, or Rs. 90,000 + Rs. 60,000 = Rs. 1,50,000; dividing this by sales of Rs. 3,00,000 and multiplying by 100…
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A company has fixed cost of Rs.90,000, sales Rs.300,000 and profit of Rs.60,000. Their P/V ratio will be:
Answer and explanation
Correct answer B
The P/V ratio is 50%. Contribution equals fixed cost plus profit, or Rs. 90,000 + Rs. 60,000 = Rs. 1,50,000; dividing this by sales of Rs. 3,00,000 and multiplying by 100 gives 50%.
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Kerala SET (LBS Centre)