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Shankar posted an Question
March 10, 2022 • 22:07 pm 2 points
  • UGC NET
  • Commerce

6) from the following information about a firm, what will be the contribution to sales (c/s) ratio and the profit? sales 100,000 fixed cost = 20,000 break-even

6) From the following information about a firm, what will be the contribution to sales (c/s) ratio and the profit? Sales 100,000 Fixed Cost = 20,000 Break-even Point = 40,000 = 100,000 fori coa = { 20,000 en 3C fRaf (aao scE01 tasc)= 40,00o

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    Barkha best-answer

    Break even point = Fixed cost / Contribution margin per unit Here , Break even point is given as 40,000 and fixed cost as 20,000. so putting it in the formula you get, 40,000= 20,000 / Contribution margin per unit. So, contribution margin comes to be 0.5 Now, To calculate the profit, Sales = 100,000 - Variable cost = 50,000( Here variable cost is calculated by subtracting sales - contribution) = Contribution = (0.5*100000) =50,000 - Fixed cost = 20,000 =Profit = 30,000 Ans . So, the profit comes to be Rs 30,000. Now, to calculate the Contribution/ Sales ratio which is the pv ratio 50,000/100,000 = C/S 1/2 or 0.5 Ans

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