Use the Table for the Question(s) Below

question 60

Multiple Choice

Use the table for the question(s) below.
Income Statement for Xenon Manufacturing:
Selling, general,
Earnings before interest

-Consider the above Income Statement for Xenon Manufacturing. All values are in millions of dollars. Calculate the gross margin for 2008 and 2009. What does the change in the gross margin between these two years imply about the company?

• A) The efficiency of Xenon Manufacturing has significantly risen between 2008 and 2009.
• B) The ability of Xenon Manufacturing to sell its goods and services for more than the costs of producing them rose between 2008 and 2009.
• C) The ability of Xenon Manufacturing to sell its goods and services for more than the costs of producing them fell between 2008 and 2009.
• D) The leverage of Xenon Manufacturing fell slightly between 2008 and 2009.

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Definitions:

Cognitive Dissonance Theory

A theory proposed by Leon Festinger that suggests discomfort arises from holding two conflicting beliefs, leading to an alteration in one's attitudes or behaviors to reduce the dissonance.

Psychological Discomfort

Psychological discomfort is a state of mental unease or distress, often resulting from challenging or conflicting beliefs, thoughts, or emotions.

Attitudes And Behaviors

Refers to the relationship between how individuals think and feel about various topics, objects, or individuals and how this affects their actions or reactions in various situations.

Effort Justification

The phenomenon where people attribute greater value to outcomes they had to put effort into achieving.