________ are subtracted from sales to calculate gross margin.
A) Variable and fixed manufacturing costs
B) Fixed administrative costs
C) Variable administrative costs
D) Fixed selling costs

Question

Quizplus · Accepted Answer

Gross margin is calculated by subtracting the cost of goods sold from the total revenue. The cost of goods sold includes both variable and fixed manufacturing costs, such as direct labor, materials, and overhead expenses necessary to produce the product. Fixed administrative costs, fixed selling costs, and variable administrative costs are not included in the calculation of gross margin.

________ Are Subtracted from Sales to Calculate Gross Margin