The effect of a price reduction is always to reduce the P/V ratio, to raise the break-even

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The effect of a price reduction is always to reduce the P/V ratio, to raise the break-even point, and to shorten the margin of safety. Explain with a suitable illustration.

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Cost Accounting

ISBN: 9780070221628

4th Edition

Authors: Jawahar Lal, Seema Srivastava

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Question Posted: Sep 07, 2023 12:49 PM

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The effect of a price reduction is always to reduce the P/V ratio, to raise the break-even

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A price reduction typically has several effects on a companys costvolumeprofit CVP analysis including reducing the contribution margin per unit and al...View the full answer

Cost Accounting

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