Question

Following details for a small manufacturing company is available,
Actual sale = Rs. 45000
Fixed cost = Rs. 10000
Profit at given sale = Rs. 8000

What will be the profit when sale is Rs. 125000

• A. Rs. 36000
• B. Rs. 40000
• C. Rs. 32000
• D. Rs. 44000

Answer 1

The correct option is B Rs. 40000

${\left(\frac{P}{V}\right)}_{\text{ratio}}=\frac{\text{Contribution Margin}}{\text{Sales}}=\frac{S-V}{S}=\frac{F+P}{S}$

$=\left(\frac{10000+8000}{45000}\right)=0.4$

$=\frac{F+P_1}{S_1}=\frac{F+P_2}{S_2}$

$\frac{10000+8000}{45000}=\frac{10000+P_2}{125000}$

$\left(0.4\right)\times 125000-10000=P_2$

$P_2=\text{Rs.}40000$