[amp_mcq option1=”$${\\text{P\/V Ratio}} = \\frac{{{\\text{S}} – {\\text{V}}}}{{\\text{S}}} \\times 100$$” option2=”$${\\text{P\/V Ratio}} = \\frac{{{\\text{Profit}}}}{{{\\text{MOS}}}} \\times 100$$” option3=”$${\\text{P\/V Ratio}} = \\frac{{{\\text{Change in Profit}}}}{{{\\text{Change in Total Cost}}}} \\times 100$$” option4=”$${\\text{P\/V Ratio}} = \\frac{{\\text{F}}}{{{\\text{BEP(Rs}}{\\text{.)}}}} \\times 100$$” correct=”option3″]<\/p>\n
The correct answer is C.<\/p>\n
The P\/V ratio, or profit-to-volume ratio, is a measure of a company’s profitability. It is calculated by dividing the company’s profit by its sales revenue. A higher P\/V ratio indicates that the company is more profitable.<\/p>\n
The formula for the P\/V ratio is:<\/p>\n
$$P\/V Ratio = \\frac{Profit}{Sales Revenue}$$<\/p>\n
Option A is the correct formula for the P\/V ratio.<\/p>\n
Option B is not the correct formula for the P\/V ratio. The MOS, or margin of safety, is a measure of how much sales can decline before the company starts to lose money. It is calculated by subtracting the break-even point from the company’s sales revenue.<\/p>\n
Option C is not the correct formula for the P\/V ratio. The change in profit is not a measure of profitability. Profitability is a measure of how much money a company makes relative to its sales revenue.<\/p>\n
Option D is not the correct formula for the P\/V ratio. The break-even point is the level of sales revenue at which a company makes no profit and no loss. It is calculated by dividing the company’s fixed costs by its contribution margin.<\/p>\n
The contribution margin is the amount of money that each unit of sales contributes to covering the company’s fixed costs. It is calculated by subtracting the variable costs from the sales revenue.<\/p>\n","protected":false},"excerpt":{"rendered":"
[amp_mcq option1=”$${\\text{P\/V Ratio}} = \\frac{{{\\text{S}} – {\\text{V}}}}{{\\text{S}}} \\times 100$$” option2=”$${\\text{P\/V Ratio}} = \\frac{{{\\text{Profit}}}}{{{\\text{MOS}}}} \\times 100$$” option3=”$${\\text{P\/V Ratio}} = \\frac{{{\\text{Change in Profit}}}}{{{\\text{Change in Total Cost}}}} \\times 100$$” option4=”$${\\text{P\/V Ratio}} = \\frac{{\\text{F}}}{{{\\text{BEP(Rs}}{\\text{.)}}}} \\times 100$$” correct=”option3″]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[85],"tags":[],"class_list":["post-57545","post","type-post","status-publish","format-standard","hentry","category-accounting","no-featured-image-padding"],"yoast_head":"\n