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:

Fat-Free Chocolate

Chocolate that has been manufactured without any fat content, often substituted with other ingredients to maintain texture and taste.

Product

An item or service created as a result of a process, which is offered in the market to satisfy the needs or wants of a customer.

Premium

Additional payment higher than the normal cost, often for enhanced benefits or services in various contexts, such as insurance or memberships.

Complimentary Approach

A sales strategy that involves giving praise or providing free products or services to potential customers to engender goodwill and facilitate sales.