The P/V ratio of a product is 60% and profit is Rs.18000. The margin of safety is:
The margin of safety is Rs. 30,000. Profit equals margin of safety multiplied by the P/V ratio, so margin of safety = 18,000 ÷ 0.60 = 30,000.
Choose your answer
The P/V ratio of a product is 60% and profit is Rs.18000. The margin of safety is:
Answer and explanation
Correct answer B
The margin of safety is Rs. 30,000. Profit equals margin of safety multiplied by the P/V ratio, so margin of safety = 18,000 ÷ 0.60 = 30,000.
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Telangana SET (TG SET)