Question

P/V ratio is 40% of sales, the remaining 60% represent ​

Answer 1

Profit.

Because it shows 60 % means maximum percentage.

Thanks

Answer 2

Concept Introduction:

Profit-volume ratio, which is commonly stated as a percentage, demonstrates the link between contribution and sales. The contribution per rupee of sales is represented by the ratio. Because fixed costs do not fluctuate in the near term, the profit-volume ratio also gauges the rate of change in profit owing to changes in sales volume.

Given Information:

P/V ratio is 40%

To Find:

We have to find what remaining 60% represents.

Solution:

Since the profit-volume ratio represents the link between the contribution and the sales 40% incates that the profit is low while the 60% represents that loss is high . Higher the P/V ratio, higher will be the profit and lower the P/V ratio, lower will be the profits.