Fixed cost Rs. 2,00,000; Sales Rs. 8,00,000; P/V Ratio 30%; the amount of' profit is .a.Rs. 35,000 .b.Rs. 40,000 .c.Rs. 45,000 .d.Rs. 50,000.
Question
Fixed cost Rs. 2,00,000; Sales Rs. 8,00,000; P/V Ratio 30%; the amount of' profit is .a.Rs. 35,000 .b.Rs. 40,000 .c.Rs. 45,000 .d.Rs. 50,000.
Solution
To calculate the profit, we first need to find the contribution. The P/V ratio (Profit/Volume ratio) is the ratio of contribution to sales.
Step 1: Calculate the Contribution Contribution = Sales * P/V Ratio Contribution = Rs. 8,00,000 * 30/100 Contribution = Rs. 2,40,000
Step 2: Calculate the Profit Profit = Contribution - Fixed Cost Profit = Rs. 2,40,000 - Rs. 2,00,000 Profit = Rs. 40,000
So, the amount of profit is Rs. 40,000. Therefore, the correct answer is (b) Rs. 40,000.
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