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Question

Bhati & Sons has sales of Rs.3,00,000,with variable expenses of Rs.2,25,000 and fixed expenses of Rs.50,000 during the year 2013-14. If the company wants to earn a profit of Rs.1,00,000 during 2014-15, it's sales must be ________________.

A
Rs.6,00,000
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B
Rs. 8,00,000
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C
Rs. 3,00,000
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D
Rs.4,00,000
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Solution

The correct option is A Rs.6,00,000
Profit =(S×P/VRatio)F.Cost
Rs.1,00,000 = (S×25
Rs.1,00,000 + 50,000 = S×25100
Rs. 1,50,000 = Sales4
Sales = Rs. 6,00,000
P/V Ratio = CS×100 OR SVS×100
=Rs.3,00,0002,25,000Rs.3,00,000×100
=Rs.75,000Rs.3,00,000×100
=25%.

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