{"id":58074,"date":"2024-04-16T01:13:06","date_gmt":"2024-04-16T01:13:06","guid":{"rendered":"https:\/\/exam.pscnotes.com\/mcq\/?p=58074"},"modified":"2024-04-16T01:13:06","modified_gmt":"2024-04-16T01:13:06","slug":"the-p-v-ratio-of-a-company-is-50-and-margin-of-safety-is-40-if-present-sales-is-rs-3000000-then-break-even-point-in-rs-will-be","status":"publish","type":"post","link":"https:\/\/exam.pscnotes.com\/mcq\/the-p-v-ratio-of-a-company-is-50-and-margin-of-safety-is-40-if-present-sales-is-rs-3000000-then-break-even-point-in-rs-will-be\/","title":{"rendered":"The P\/v ratio of a company is 50% and margin of safety is 40%. If present sales is Rs 30,00,000 then Break Even Point in Rs will be"},"content":{"rendered":"

[amp_mcq option1=”Rs 9,00,000″ option2=”Rs 18,00,000″ option3=”Rs 5,00,000″ option4=”None of the above” correct=”option2″]<\/p>\n

The correct answer is: B. Rs 18,00,000<\/strong><\/p>\n

The break-even point is the point at which a company’s revenue is equal to its costs. In other words, it is the point at which the company neither makes nor loses money.<\/p>\n

The break-even point can be calculated using the following formula:<\/p>\n

Break-even point = Fixed costs \/ Contribution margin<\/p>\n

The contribution margin is the amount of revenue that is left over after a company has covered its variable costs. In other words, it is the amount of revenue that is available to cover fixed costs and make a profit.<\/p>\n

The P\/v ratio is the ratio of a company’s selling price to its variable cost per unit. The margin of safety is the percentage of sales that a company can lose before it reaches its break-even point.<\/p>\n

In this case, the P\/v ratio is 50% and the margin of safety is 40%. This means that the company’s contribution margin is 60% of its sales.<\/p>\n

The fixed costs are not given in the question, but we can calculate them using the following formula:<\/p>\n

Fixed costs = Break-even point * Contribution margin<\/p>\n

Substituting the values we know into the formula, we get:<\/p>\n

Fixed costs = 18,00,000 * 60\/100 = Rs 10,800,000<\/p>\n

Therefore, the break-even point for the company is Rs 18,00,000.<\/p>\n

Option A is incorrect because it is the contribution margin, not the break-even point.<\/p>\n

Option C is incorrect because it is the fixed costs, not the break-even point.<\/p>\n

Option D is incorrect because it is not one of the possible answers.<\/p>\n","protected":false},"excerpt":{"rendered":"

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