Two companies P Ltd and Q Ltd producing and selling similar products forecasted their Profits and Loss a c for the next year, which is as follows Calculate (a) P V ratio, break even point, and margin of safety for both the companies (b) Sales required to earn a profit of 30,000 for both companies (...

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Two companies P Ltd. and Q Ltd. producing and selling similar products forecasted their Profits and Loss

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Two companies P Ltd. and Q Ltd. producing and selling similar products forecasted their Profits and Loss a/c for the next year, which is as follows: image text in transcribed

Calculate:

(a) P/V ratio, break-even point, and margin of safety for both the companies.

(b) Sales required to earn a profit of ₹30,000 for both companies.

(c) Under the following situations, which company will show better results (i) Increase in sales (ii) Decrease in sales.

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Management Accounting Text Problems And Cases

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6th Edition

Authors: M Y Khan, P K Jain

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Two companies P Ltd. and Q Ltd. producing and selling similar products forecasted their Profits and Loss

Question:

Sales Less: Variable Cost *2,00,000 Fixed Expenses 50,000 Estimated Profit P Ltd. *3,00,000 2,50,000 2,25,000 25,000 50,000 Q Ltd. 3,00,000 2,50,000 50,000

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Sales Less: Variable Cost 2,00,000 Fixed Expenses 50,000 Estimated Profit P Ltd. 3,00,000 2,50,000 2,25,000 25,000 50,000 Q Ltd. 3,00,000 2,50,000 50,000