Sales is 15000 units @ 25 DHS each = 375000 DHS

Fixed Cost is: 48000 DHS

Variable cost @ 10 DHS each - 150000 DHS

Calculate ( Answers should be computerized and in details)

1- P/V Ratio

2- Break - Even Sales

3- Margin of safety

4- Margin of Safty Ratio

5- Suppose the company has reduced the selling price by 11 %. Find out the new P/V Ratio , Break - Even , Sales , Margin of safety Margin of Safty Ratio

6- Find out the sales to be achieved to get the same amount of profit with the reduced selling price

Answers

1. Pv ratio= contribution margin /sales

=(375000-150000)/375000 = 2250000/3750000 = 60%

2. Break-even point in units = fixed cost / contribution per unit

= 48000/15 = 13250 units

Break-even point in dollars = fixed cost / pv ratio

=48000/0.6 = $80000

3.margin of safety = profit /pv ratio

=202000/0.6 = $336,666

4. Margin of safety ratio

= margin of safety in dollars/ actual sales

=336666/375000

=89.7%

Required

Kindly Answer Question 5 + 6