The Gross Margin Ratio Is Defined as Gross Margin Divided

question 177

True/False

The gross margin ratio is defined as gross margin divided by net sales.

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Definitions:

Variable Cost

Expenses that change in proportion to the activity or volume of business, such as materials, labor, and transaction fees.

Depreciation Expense

An accounting method of allocating the cost of a tangible asset over its useful life to represent wear and tear over time.

Variable Costs

Expenses that directly fluctuate according to the volume of production or sales.

Labour Cost

is the total expenditure incurred by employers to compensate their employees, including wages, benefits, and taxes.