What Is a Difference Between the Profit Margin and the Gross

question 12

Multiple Choice

What is a difference between the profit margin and the gross profit rate?

• A)None, these are interchangeable terms.
• B)The gross profit rate is computed by dividing net sales by gross profit and the profit margin is computed by dividing net sales by net income.
• C)The gross profit rate will normally be higher than the profit margin ratio.
• D)A profit margin of 7% means that 7 cents of each net sales dollar ends up in net income and a gross profit rate of 7% means that the cost of the goods were 7% of the selling price.

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Definitions:

Behaviors

Actions or reactions of an individual or group in response to external or internal stimuli.

Personality

The fusion of attributes and traits that define an individual's distinct persona.

Organizational Commitment

The psychological attachment felt by an individual towards an organization, reflecting the individual's willingness to remain part of the organization.

Work Commitment

The degree of dedication an individual shows toward their job, often reflected in their work ethic and engagement.