Profit Margin Is Calculated by Dividing

question 34

Multiple Choice

Profit margin is calculated by dividing

• A)sales by cost of goods sold.
• B)gross profit by net sales.
• C)net income by equity.
• D)net income by net sales.

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Definitions:

Activity Variance

The difference between what was planned or expected in terms of costs or activity levels and what was actually achieved.

Net Operating Income

The profit generated from a company's operational activities, excluding taxes and interest.

Units

Basic quantities or measures of a product or service, representing a countable number of these items.

Activity Variance

The difference between the estimated cost/benefit of an activity and its actual cost/benefit.