16. Which of the following statements is true?A. Gross profit margin is always less than net profit marginB. Gross profit margin is always greater than net profit marginC. Gross profit margin is can be less than or greater than net profit margin17 A business has a decreasing gross profit however, gross margin percentage is constant. Whatcould be the possible reason?A. Sales is increasing, but cost of sales is decreasingB. Sales and cost of sales increase by the same percentageC. Sales and cost of sales decrease by the same percentage

Gross profit margin = Total sales revenue - cost of goods sold

16. Which of the following statements is true? A. Gross profit margin is always less than net profit margin B. Gross profit margin is always greater than net profit margin C. Gross profit margin is can be less than or greater than net profit margin

16. Which of the following statements is true? A. Gross profit margin is always less than net profit margin B. Gross profit margin is always greater than net profit margin C. Gross profit margin is can be less than or greater than net profit margin

Accounting

27th Edition

ISBN:9781337272094

Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.

Publisher:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.

Chapter21: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 21.18EX

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Question

16. Which of the following statements is true?
A. Gross profit margin is always less than net profit margin
B. Gross profit margin is always greater than net profit margin
C. Gross profit margin is can be less than or greater than net profit margin
17 A business has a decreasing gross profit however, gross margin percentage is constant. What
could be the possible reason?
A. Sales is increasing, but cost of sales is decreasing
B. Sales and cost of sales increase by the same percentage
C. Sales and cost of sales decrease by the same percentage

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