A decrease in gross margin may best be explained by:
A) Lower overhead expenses
B) Higher overhead expenses
C) Lower selling prices
D) Lower cost of goods sold

Question

Quizplus · Accepted Answer

A decrease in gross margin is typically due to lower selling prices, as gross margin is calculated as sales revenue minus the cost of goods sold. Lower selling prices reduce sales revenue, thus reducing the gross margin.

A Decrease in Gross Margin May Best Be Explained By