Multiple choice

Directions: Choose the correct option for the given question.

An increase in physical sales volume _____ P/V ratio.

  1. increases

  2. decreases

  3. either (1) or (2)

  4. does not affect

  5. none of these
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

The P/V ratio is a ratio of contribution to sales. Since both contribution and sales change proportionally with volume (assuming constant price and variable cost per unit), the ratio remains constant.

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