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:

Inventory

The total amount of goods and materials held in stock by a business, warehouse, or point of sale.

Linear Model

A linear model is a mathematical representation used to describe the relationship between two variables by fitting a linear equation to observed data.

Cater

To provide food and drink, typically at social events and in a professional capacity.

Sales Price

The actual price at which an item or service is sold to the public, often after discounts or promotions are applied.