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The P/V Ratio of a firm dealing in precision instruments is 50% and margin of safety is 40%. You are required to work-out BEP and the net profit if the sales volume is Rs.50,00,000. If 25% of variable cost is labour cost, what will be the effect on BEP and profit when labour efficiency decreases by 5%

The P/V Ratio of a firm dealing in precision instruments is 50% and margin of safety is 40%. You are required to work-out BEP and the net profit if the sales volume is Rs.50,00,000. If 25% of variable cost is labour cost, what will be the effect on BEP and profit when labour efficiency decreases by 5%

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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The P/V Ratio of a firm dealing in precision instruments is 50% and margin of safety is 40%. You are required to work-out BEP and the net profit if the sales volume is Rs.50,00,000. If 25% of variable cost is labour cost, what will be the effect on BEP and profit when labour efficiency decreases by 5%
Transcribed Image Text:The P/V Ratio of a firm dealing in precision instruments is 50% and margin of safety is 40%. You are required to work-out BEP and the net profit if the sales volume is Rs.50,00,000. If 25% of variable cost is labour cost, what will be the effect on BEP and profit when labour efficiency decreases by 5%
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