What Is the Formula to Calculate Gross Margin

question 10

Multiple Choice

What is the formula to calculate gross margin?

• A) sales revenue - cost of goods sold
• B) sales revenue - selling and administrative expenses
• C) total product costs + beginning work-in-process - ending work-in-process
• D) cost of goods manufactured + beginning finished goods inventory- ending finished goods inventory

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Definitions:

Franchisor

A business entity that grants the right to use its business model and brand to an independent operator, known as a franchisee, in exchange for a fee.

Small Business Ownership

The operation and management of a small enterprise, typically characterized by a limited number of employees and relatively low volume of sales.

Franchising

A business model that allows individuals or entities to operate a store or restaurant by licensing a brand and business system from a franchisor.

Disadvantages

Negative or less favorable aspects of a situation, plan, or decision.