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During 2010,Home Style's Cost of Goods Sold Percentage Was 68

Question 60

Multiple Choice

During 2010,Home Style's cost of goods sold percentage was 68.2% and selling and store operating costs was 19.3% of sales.During 2009,their cost of goods sold percentage was 68.9% while selling and store operating costs was 19.2% of sales.What effect would the change in these percentages have on 2010's gross margin percentage and profit margin percentage?


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

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