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Marginal Costing
If break even point is 40% and net profit ratio is 12% find out contribution sales ratio.
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Let sales Rs 100 , M/S =60 , BE Sales =40. Margin of safety =profit /Pv ratio 60=12÷100-VC/100 ,VC=80, Hence Contribution=20, Fixed cost =8, profit=12 PV =20÷100 =0.20
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