{"id":54092,"date":"2024-04-16T00:04:18","date_gmt":"2024-04-16T00:04:18","guid":{"rendered":"https:\/\/exam.pscnotes.com\/mcq\/?p=54092"},"modified":"2024-04-16T00:04:18","modified_gmt":"2024-04-16T00:04:18","slug":"which-of-the-following-is-not-correct","status":"publish","type":"post","link":"https:\/\/exam.pscnotes.com\/mcq\/which-of-the-following-is-not-correct\/","title":{"rendered":"Which of the following is not correct?"},"content":{"rendered":"<p>\r\n    <!-- Check if it's an AMP page -->\r\n            <!-- Non-AMP version -->\r\n        <div class=\"mcq-container\" data-quiz-id=\"quizState_6a9736d2812ae\">\r\n                                            <div class=\"option\" data-option-key=\"option1\" data-is-correct=\"true\">\r\n                    $${\text{Margin of Safety}} = \frac{{{\text{Profit}}}}{{\frac{{\text{P}}}{{\text{V}}}{\text{ratio}}}}$$                <\/div>\r\n                                            <div class=\"option\" data-option-key=\"option2\" data-is-correct=\"false\">\r\n                    $$\frac{{\text{P}}}{{\text{V}}}{\text{ratio}} = \frac{{{\text{Change in contribution}}}}{{{\text{Change in sales}}}} \times 100$$                <\/div>\r\n                                            <div class=\"option\" data-option-key=\"option3\" data-is-correct=\"false\">\r\n                    $${\text{Breakeven point in units}} = \frac{{{\text{Fixed Cost}}}}{{{\text{Contribution per unit}}}}$$                <\/div>\r\n                                            <div class=\"option\" data-option-key=\"option4\" data-is-correct=\"false\">\r\n                    $${\text{Required sales to earn the desired profits}} = \frac{{{\text{Desired Profit}}}}{{\frac{{\text{P}}}{{\text{V}}}{\text{ratio}}}}$$                <\/div>\r\n                            \r\n            <!-- Feedback messages for non-AMP -->\r\n            <div class=\"feedback\" data-feedback=\"wrong\">Answer is Right!<\/div>\r\n            <div class=\"feedback\" data-feedback=\"right\">Answer is Wrong!<\/div>\r\n        <\/div>\r\n\r\n        <script>\r\n        document.addEventListener('DOMContentLoaded', function () {\r\n            var containers = document.querySelectorAll('.mcq-container');\r\n\r\n            containers.forEach(function(container) {\r\n                var options = container.querySelectorAll('.option');\r\n                var feedbackSelect = container.querySelector('[data-feedback=\"select\"]');\r\n                var feedbackWrong = container.querySelector('[data-feedback=\"wrong\"]');\r\n                var feedbackRight = container.querySelector('[data-feedback=\"right\"]');\r\n\r\n                options.forEach(function(option) {\r\n                    option.addEventListener('click', function() {\r\n                        var selectedOption = option.getAttribute('data-option-key');\r\n                        var isCorrect = option.getAttribute('data-is-correct') === 'true';\r\n\r\n                        \/\/ Remove previous selections\r\n                        options.forEach(function(opt) {\r\n                            opt.classList.remove('correct', 'incorrect');\r\n                        });\r\n\r\n                        \/\/ Add the correct\/incorrect class\r\n                        if (isCorrect) {\r\n                            option.classList.add('correct');\r\n                            feedbackRight.hidden = false;\r\n                            feedbackWrong.hidden = true;\r\n                        } else {\r\n                            option.classList.add('incorrect');\r\n                            feedbackRight.hidden = true;\r\n                            feedbackWrong.hidden = false;\r\n                        }\r\n\r\n                        \/\/ Hide select feedback\r\n                        feedbackSelect.hidden = true;\r\n                    });\r\n                });\r\n            });\r\n        });\r\n        <\/script>\r\n    \r\n    <!--more--><\/p>\n<p>The correct answer is: A. ${\\text{Margin of Safety}} = \\frac{{{\\text{Profit}}}}{{\\frac{{\\text{P}}}{{\\text{V}}}{\\text{ratio}}}}$<\/p>\n<p>The margin of safety is a measure of how much sales can decline before a company starts to lose money. It is calculated by dividing the contribution margin by the contribution margin ratio. The contribution margin is the amount of revenue that remains after variable costs have been deducted. The contribution margin ratio is the percentage of revenue that is left after variable costs have been deducted.<\/p>\n<p>The formula for the margin of safety is:<\/p>\n<p>Margin of safety = Contribution margin \/ Contribution margin ratio<\/p>\n<p>The margin of safety is a useful measure for managers to track because it indicates how much risk the company is taking. A high margin of safety indicates that the company is not taking much risk, while a low margin of safety indicates that the company is taking a lot of risk.<\/p>\n<p>The other options are all correct.<\/p>\n<p>B. $\\frac{{\\text{P}}}{{\\text{V}}}{\\text{ratio}} = \\frac{{{\\text{Change in contribution}}}}{{{\\text{Change in sales}}}} \\times 100$<\/p>\n<p>The profit-to-volume ratio is a measure of how much profit a company makes for every unit of sales. It is calculated by dividing the profit <div class=\"telegram-channel-container\">\r\n        <a href=\"https:\/\/t.me\/pscnotes2025\" target=\"_blank\" class=\"telegram-channel-button\">\r\n            <span class=\"telegram-icon\">\r\n                <svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" viewBox=\"0 0 496 512\">\r\n                    <path fill=\"white\" d=\"M248,8C111,8,0,119,0,256s111,248,248,248s248-111,248-248S385,8,248,8z M362,177L320,367c-3,14-10,18-20,14l-56-41l-27,26 c-3,3-5,5-10,5l4-63L323,196c5-5-1-7-8-3l-98,62l-42-13c-9-3-10-9,2-14l162-63C351,160,365,164,362,177z\"\/>\r\n                <\/svg>\r\n            <\/span>\r\n            Join Our Telegram Channel\r\n        <\/a>\r\n    <\/div> by the sales.<\/p>\n<p>The formula for the profit-to-volume ratio is:<\/p>\n<p>Profit-to-volume ratio = Profit \/ Sales<\/p>\n<p>The profit-to-volume ratio is a useful measure for managers to track because it indicates how profitable the company is. A high profit-to-volume ratio indicates that <div class=\"youtube-subscribe-container\">\r\n        <a href=\"https:\/\/www.youtube.com\/channel\/UCNHT8lW-JmLC68rjBfZhdkg?sub_confirmation=1\" target=\"_blank\" class=\"youtube-subscribe-button\">\r\n            <span class=\"youtube-icon\">\r\n                <svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" viewBox=\"0 0 576 512\">\r\n                    <path d=\"M549.7 124.1c-6.3-23.7-24.8-42.3-48.3-48.6C458.8 64 288 64 288 64S117.2 64 74.6 75.5c-23.5 6.3-42 24.9-48.3 48.6-11.4 42.9-11.4 132.3-11.4 132.3s0 89.4 11.4 132.3c6.3 23.7 24.8 41.5 48.3 47.8C117.2 448 288 448 288 448s170.8 0 213.4-11.5c23.5-6.3 42-24.2 48.3-47.8 11.4-42.9 11.4-132.3 11.4-132.3s0-89.4-11.4-132.3zm-317.5 213.5V175.2l142.7 81.2-142.7 81.2z\"\/>\r\n                <\/svg>\r\n            <\/span>\r\n            Subscribe on YouTube\r\n        <\/a>\r\n    <\/div> the company is very profitable, while a low profit-to-volume ratio indicates that the company is not very profitable.<\/p>\n<p>C. ${\\text{Breakeven point in units}} = \\frac{{{\\text{Fixed Cost}}}}{{{\\text{Contribution per unit}}}}}$<\/p>\n<p>The breakeven point is the point at which a company&#8217;s revenue equals its costs. It is calculated by dividing the fixed costs by the contribution per unit.<\/p>\n<p>The formula for the breakeven point in units is:<\/p>\n<p>Breakeven point in units = Fixed cost \/ Contribution per unit<\/p>\n<p>The breakeven point is a useful measure for managers to track because it indicates how much sales the company needs to make in order to cover its costs.<\/p>\n<p>D. ${\\text{Required sales to earn the desired profits}} = \\frac{{{\\text{Desired Profit}}}}{{\\frac{{\\text{P}}}{{\\text{V}}}{\\text{ratio}}}}}$<\/p>\n<p>The required sales to earn the desired profits is the amount of sales that a company needs to make in order to earn the desired profits. It is calculated by dividing the desired profits by the profit-to-volume ratio.<\/p>\n<p>The formula for the required sales to earn the desired profits is:<\/p>\n<p>Required sales to earn the desired profits = Desired profit \/ Profit-to-volume ratio<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Subscribe on YouTube<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[952],"tags":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v22.2 (Yoast SEO v23.3) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Which of the following is not correct?<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/exam.pscnotes.com\/mcq\/which-of-the-following-is-not-correct\/\" \/>\n<meta property=\"og:locale\" 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