The Gross Margin Percentage Is Calculated as

question 143

Multiple Choice

The gross margin percentage is calculated as

• A)gross margin divided by cost of goods sold.
• B)gross margin divided by net sales revenue.
• C)gross margin divided by net income.
• D)net income divided by gross margin.

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Definitions:

Unavoidable Allocated Fixed Corporate Costs

Fixed expenses that are distributed across different departments or products within a company, and cannot be avoided or eliminated.

Contribution Margin

Contribution margin represents the portion of sales revenue that remains after variable costs are deducted, indicating how much contributes to covering fixed costs and generating profit.

Variable Manufacturing Overhead

Costs in the production process that vary with the level of production output, such as utilities for machinery.

Direct Labour

refers to the workforce directly involved in the manufacture of goods or provision of services.