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sir a bpp kit q no 164 is looking for operational gearing.. they use formula stats , contribution/PBIT ,but i have learned it this way ,fixed costs/variable costs or fixed costs/total costs.. i am in confusion.
There is no standard way of measuring operational gearing – the examiner himself has measured it is different ways in different questions.
However, in a recent MCQ he did measure it as contribution/PBIT and so it is best to use that as a measure if it comes as an MCQ.
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