The cost volume and profit relationship of a company is described by the equation Y= Rs. 3,00,000 + 0.7 X in which X represents sales revenue and Y represents the total Cost.
The C/S ratio and Break-even point will be:
Explanation:
C/S ratio= Contribution/Sales x 100= X (-) 0.7 X/X= 0.30 X/X = 30%
Break even point= Fixed Cost/ P/V ratio= 3,00,000/0.30= 10,00,000/-