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Operating Profit Ratio

Given: S...

Question

Given:
Sales = Rs. 120000
Variable cost = Rs.90000
Fixed cost = Rs. 10000
what will be BEP?

A

10000

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B

40000

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C

30000

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D

70000

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Solution

The correct option is B 40000
BEP (in Rs. ) = $\frac{F i x e d C o s t}{P / V R a t i o}$
= $\frac{10000}{25} \times 100$
=40000
P/V Ratio = $\frac{S a l e s - V a r i a b l e C o s t}{S a l e s} \times 100$
= $\frac{120000 - 90000}{120000} \times 100$
= $\frac{30000}{120000} \times 100$
=25%.

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