The managerial accountant at the Toy Factory presented the following information at a meeting: Which company earns more gross profit for each dollar of sales revenue based on this common-size statement?

Question

The managerial accountant at the Toy Factory presented the following information at a meeting:   Which company earns more gross profit for each dollar of sales revenue based on this common-size statement?

Quizplus · Accepted Answer

Based on the common-size statement presented, Company B has a higher gross profit percentage (25%) compared to Company A (20%). This means that for each dollar of sales revenue, Company B earns more gross profit than Company A. Therefore, the answer is B.

The Managerial Accountant at the Toy Factory Presented the Following