pv ratios

jkc
jkc Registered Posts: 166 ? ? ?
have i got the correct formula please?
Pv ratio = contribution/selling price
then use this to find Break even sales revenue Fixed cost/Pv ratio

I have been using Break even in units multiplied by Unit price to find break even sales revenue.
Do i need to know the pv formula if I can find the BE sales rev bythis method. as im am having reall trouble memorising pv.
thanks.

Comments

  • SandyHood
    SandyHood Registered, Moderator Posts: 2,034
    2 formulae

    contribution per unit/ price

    or
    total conribution/total revenue

    the second could be used by a firm with several products differently priced

    in this case you could not have a break even number of units, only break even sales revenue

    It hasn't been tested since it was added to the syllabus - in my humble opinion it is overdue, but it might be something the examiner does not intend to test.
    Sandy
    [email protected]
    www.sandyhood.com
  • jkc
    jkc Registered Posts: 166 ? ? ?
    thanks sandy.
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