Dear sir please explain me one thing.
Q.1 Gross profit ratio can be affected by volume sold or produced? In my opinion it is not affected by volume. It can only be affected by selling price/unit and cost if sales per unit. Am i right? If not please explain.
Q.2 Net profit ration can be affected by volume sold or produced? In my opinion it is affected by volume due to presence of fixed non manufacturing cost. Am i right sir? If not please explain sir.
Thanx
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Performance measurement
7y ago#1What you have written is correct if they are presented just as statements.
However the time that gross profit ratio could be affected by the volume is if by producing more they are able to get materials at a discount (because they are buying larger quantities of materials).
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