Beruflich Dokumente
Kultur Dokumente
Sales XXX XX
Less : VARIABLE COST XXX XX
CONTRIBUTION XXX XX
Less : FIXED COST XXX
PROFIT XXX
1) CONTRIBUTION :
Contributes towards recovering fixed
costt and
d th
then contributes
t ib t tto earn profit.
fit
a) CONTRIBUTION =
Sales – Variable Cost.
Cost
b)) CO
CONTRIBUTION O =
Fixed Cost + Profit.
2) P/V RATIO
Rate at which profit is earned on
additional units.
A) Contribution p.u
pu
X 100
Sales p
p.u
u
Or
B) Contribution
X 100
Sales
Or
C) Diff. In profit
X 100
Diff. In sales
TOTAL SALES
2.
(Fi d Cost
(Fixed C t + Desired
D i d Profit)
P fit) Sales
Contribution ×
Or
3.
(Fixed Cost + Desired Profit)
P/V Ratio
TYPES OF PROBLEMS :
1 Formula
1. F l based
b d problems
bl
2. Problems based on Best sales mix.
Whichever sales mix gives maximum
contribution is the best sales mix
mix.
3. Problems based on MERGER of
Plants / Factories
Merge the plants / factories
bringing them to a common
capacity level.
4. Problems with 2 sales & 2 Profit figures.
a) First find out P/V ratio as
Diff In profit
Diff.
X 100
Diff. In sales
b) Using P/V ratio =
Contribution
X 100
Sales
Find out Contribution.
C) Using Contribution find out fixed cost as
Contribution = Fixed Cost + Profit.
Important Questions
Q 2 4,
Q.2, 4 8,
8 9,
9 11,
11 14,
14 16,
16 17