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Performance measurement

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA PM Exams › Performance measurement

  • This topic has 1 reply, 2 voices, and was last updated 6 years ago by John Moffat.
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  • June 30, 2019 at 1:37 pm #521572
    maan87
    Member
    • Topics: 119
    • Replies: 155
    • ☆☆☆

    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

    June 30, 2019 at 4:57 pm #521579
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54758
    • ☆☆☆☆☆

    What 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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