A company has Profit/Volume (P/V) Ratio 40 percent. By what percentage must variable cost be decreased to offset 25% reduction in selling price, so as to maintain the same P/V Ratio?
CS Executive · Corporate and Management Accounting · PYQS · December 2020
A company has Profit/Volume (P/V) Ratio 40 percent. By what percentage must variable cost be decreased to offset 25% reduction in selling price, so as to maintain the same P/V Ratio?
Answer & Explanation:
Correct Answer: Option (B)
Official answer key: (B).
Topics: Management Accounting
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