BC Company has a gross profit percentage of 61% while AB Company has a gross profit percentage of 37%.Which of the following is true?
A)BC Company will report a higher net income than AB Company.
B)AB Company must have a greater sales volume than BC Company.
C)BC Company must be more efficient at controlling selling,general,and administrative expenses than AB Company.
D)None of the answers are acceptable.

Question

Quizplus · Accepted Answer

Gross profit percentage does not directly determine net income, sales volume, or efficiency in controlling selling, general, and administrative expenses. It only indicates the percentage of revenue that exceeds the cost of goods sold.

BC Company Has a Gross Profit Percentage of 61% While