Silworth Limited and De Souza Limited are both engaged in fish canning operations.The trading accounts for the two companies for the year ended 31 March 20X7 are as follows:
The majority of Silworth's business, and the whole of De Souza's, comprises fish canning.However, Silworth also runs a fish farming operation.15% of Silworth's revenue arise from fish farming and this operation yields a gross profit margin of 22.7%.
Which one of the following statements is correct?
A) Silworth's gross profit margin on fish canning is higher than De Souza's but its revenue is lower.
B) Silworth's gross profit margin on fish canning is lower than De Souza's and its revenue is also lower.
C) Silworth's gross profit margin on fish canning is higher than De Souza's and its revenue is also higher.
D) Silworth's gross profit margin on fish canning is lower than De Souza's but its revenue is higher.
Correct Answer:
Verified
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