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During 2019,Home Style's Cost of Goods Sold Percentage Was 68

Question 46

Multiple Choice

During 2019,Home Style's cost of goods sold percentage was 68.2%,and selling and store operating costs were 19.3% of sales.During 2018,Home Style's cost of goods sold percentage was 70.1% while selling and store operating costs were 19.0% of sales.What effect would the change in these percentages have on 2019's gross profit percentage and net profit margin percentage?


A) The decrease in the cost of goods sold percentage would increase both the gross profit and net profit margin percentages,but the increase in the selling and store operating costs percentage would decrease both the gross profit and net profit margin percentages.
B) The decrease in the cost of goods sold percentage would decrease both the gross profit and net profit margin percentages,but the increase in the selling and store operating costs percentage would increase both the gross profit and net profit margin percentages.
C) The decrease in the cost of goods sold percentage would increase both the gross profit and net profit margin percentages,but the increase in the selling and store operating costs percentage would decrease only the net profit margin percentage.
D) The decrease in the cost of goods sold percentage would decrease both the gross profit and net profit margin percentages,but the increase in the selling and store operating costs percentage would increase only the net profit margin percentage.

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