Q1. Following information is available.Profit1,00,0002,00,000Year Sales2013201410,00,00015,00,000Calculate:(a) Profit Volume Ratio.(b) Sales required to earn profit of ₹ 4,00,000.(c) Profit when sales are20,00,000.

Profit volume ratio is the ratio between contribution and sales revenue. It is calculated by…

Q1. Following information is available. Profit 10,00,000 1,00,000 15,00,000 2,00,000 Year Sales 2013 2014 Calculate: (a) Profit Volume Ratio. (b) Sales required to earn profit of 4,00,000. (c) Profit when sales are 20,00,000.

Q1. Following information is available. Profit 10,00,000 1,00,000 15,00,000 2,00,000 Year Sales 2013 2014 Calculate: (a) Profit Volume Ratio. (b) Sales required to earn profit of 4,00,000. (c) Profit when sales are 20,00,000.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Q1. Following information is available.
Profit
1,00,000
2,00,000
Year Sales
2013
2014
10,00,000
15,00,000
Calculate:
(a) Profit Volume Ratio.
(b) Sales required to earn profit of ₹ 4,00,000.
(c) Profit when sales are
20,00,000.

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Step 1: Introduce to profit volume ratio

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Step 2: Working for profit volume ratio

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Step 3: Working for fixed cost

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Step 4: Working for sales required to earn profit of ₹4,00,000

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Step 5: Working for profit when sales are ₹20,00,000

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