If a company achieves a small increase in its gross profit percentage from one year to the next,the company:
A)will have a higher net income.
B)must have had a sales volume increase.
C)must have decreased its operating expenses.
D)might be obtaining products at a lower cost per unit.

Question

Quizplus · Accepted Answer

The gross profit percentage is not tied to sales volume.An increase in the gross profit percentage would result from an increase in the selling price and/or a decrease in the cost of the product.
An increase in the gross profit percentage will not necessarily result in a higher net income.Other factors,such as an increase in operating expenses,could cause net income to remain unchanged or decrease.

If a Company Achieves a Small Increase in Its Gross