Q4) A Ltd. furnishes the following data relating to the year 2020. I st half of the year 2nd half of the year Sales (Rs.) 45.000 50,000 Total cost (Rs.) 40.000 43,000 Assuming that there is no change in prices and variable cost and that the fixed expenses are incurred equally in the two half year period, calculate- P/V Ratio 2 Fixed expenses Break even sales Percentage of margin of safety to total sales.

a) PV ratio =40%

b) Fixed cost= Rs. 13000

c) BEP sales = Rs.32500

d) Percentage of margin of safety to total sales 

For first half = 27.78%

For second half = 35%

Step-by-step explanation

a) PV Ratio = Change in profit / change in sales ist half profit - 45000 - 40000 = 5000 and half proget = 50,000 - 43000 = 7000 PV Ratio -(7000 -5002/ (50,000-45002) ( X 100 6 ) Fixed Expenses Profit - Contribution - Fixed Cost 5000 = 45000 x 40% - Fixed cost 5000 = 18000 - Fixed Cost Fixed Cost = 13000 () BEP Sales - Fixed Cost / PV Ratio = 13000 / 40% = 32500 d margin of Safety Jos first half MOS - Actual Sales - Break Even Sales - 45000 - 32500 - 12500 Margin of Sayety Fos second half = 50,000 - 32500 = 17500 mos /= 12500 X 100 - 27.78%% Total Sales 450 00 17500 x100 = 35% 50,000