Use the Table for the Question(s)below

question 51

Multiple Choice

Use the table for the question(s) below.
-Consider the above Income Statement for Xenon Manufacturing. All values are in millions of dollars. Calculate the gross margin for 2017 and 2018. What does the change in the gross margin between these two years imply about the company?

• A)The leverage of Xenon Manufacturing fell slightly between 2017 and 2018.
• B)The ability of Xenon Manufacturing to sell its goods and services for more than the costs of producing them rose between 2017 and 2018.
• C)The ability of Xenon Manufacturing to sell its goods and services for more than the costs of producing them fell between 2017 and 2018.
• D)The efficiency of Xenon Manufacturing has significantly risen between 2017 and 2018.

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Definitions:

Straight-Line Depreciation

A method of allocating the cost of a tangible asset over its useful life in equal annual increments.

Expected Production

The forecasted amount of goods or services a company plans to produce in a specific period based on demand and capacity planning.

Impairment Loss

A decrease in an asset's value recognized in financial statements when the asset's carrying amount exceeds its recoverable amount.

Carrying Value

The net amount at which an asset or liability is reported on the balance sheet, adjusted for factors such as depreciation or amortization.