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Preparing Financial Statements of NPO-I

Given:Opening...

Question

Given:
Opening stock = 10000
Wages = 5000
Closing stock = 30000
Sales = 420000
Fixed cost = 30000
P/V ratio = 15%
What will be Margin of Safety (in Rs.)?

220000

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200000

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420000

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620000

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Solution

The correct option is C 220000
Margin of safety = Actual Sales - BEP (sales)
=420000-200000
=220000
BEP = $\frac{F i x e d C o a t}{P / V R a t i o}$
= $\frac{30000}{15} \times 100$ .

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