P/V Ratio, Break–Even Point (BEP) and Margin of Safety

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MASTER OF COMMERCE – M.Com Second Year (MCO) Solved Assignments for July 2019 and January 2020 Admission Cycles

MCO Tutor Marked Solved Assignment

Course Code : MCO – 05
Course Title : Accounting for Managerial Decisions
Assignment Code : MCO-05/TMA/2019-20
Coverage : All Blocks

MCO – 05 : Accounting for Managerial Decisions Solved Assignment for 2019-20

Question 4. The following data are available from the records of a company:
Sales Rs. 60,000
Variable Cost Rs. 30,000
Fixed Cost Rs. 15,000
You are required to :
(a) Calculate the P/V Ratio, Break – Even Point and Margin of Safety at this level.
(b) Calculate the effect of 10% increase in the sale price.
(c) Calculate the effect of 10% decrease in the sale price.

ANSWER:

P/V Ratio = 50%
Break-Even Point = Rs. 30,000/-
Margin of Safety = Rs. 30,000/-