Zen & Co made sales for a certain period for ₹25,00,000/-. The net profit for the same period was ₹2,50,000/-. Fixed overheads were ₹3,75,000/-. Calculate: P/V Ratio Sales needed to generate a profit of ₹3,75,000/- N

Answer 6(b) (i) Calculation of P/V Ratio Contribution = Fixed Cost + Profit = ₹3,75,000 + ₹2,50,000 = ₹6,25,000 P/V Ratio = Contribution / Sales = ₹6,25,000 / ₹25,00,000 = 25% (ii) Sales needed to generate a profit of ₹3,75,000/- Required Sales = (Fixed Cost + Profit) / P/V Ratio = (₹3,75,000 + ₹3,75,000) / 25% = ₹7,50,000 / 0.25 = ₹30,00,000 (iii) Net profit when sales are ₹37,50,000 Sales ₹37,50,000 PV Ratio 25.00% Contribution = Sales x P/V Ratio 9,37,500 Fixed Cost 3,75,000 Profit = Contribution - Fixed Cost 5,62,500 (iv) Break Even Point Break Even Point = Fixed Cost / P/V Ratio = ₹3,75,000 / 25% = ₹15,00,000