A firm with a gross profit margin which meets industry standard and a net profit margin which is below industry standard may have excessive ________.

Question

Quizplus · Accepted Answer

General and administrative expenses are operating expenses that are not directly related to the production of goods or services. A firm may have excessive general and administrative expenses if its net profit margin is below industry standard, even if its gross profit margin meets industry standards. This is because general and administrative expenses are deducted from gross profit to calculate net profit.

A Firm with a Gross Profit Margin Which Meets Industry