Economics · Cost Accounting
Which of the following statements is correct regarding the P/V (Profit-Volume) ratio?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1It shows the relationship between fixed cost and sales
- 2It indicates the rate at which profit increases with an increase in sales✓
- 3It is calculated as Fixed Cost ÷ Contribution
- 4It decreases when the selling price increases
Correct answer
It indicates the rate at which profit increases with an increase in sales
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