If an Entity's Selling and Distribution Expenses to Sales Ratio

question 6

Multiple Choice

If an entity's selling and distribution expenses to sales ratio increases from 2.5% in one year to 3.8% the following year,this indicates that:

• A) the entity has become more efficient in controlling its selling and distribution expenses over the period.
• B) the entity has become less efficient in controlling its selling and distribution expenses over the period.
• C) selling and distribution expenses are a lower percentage of sales.
• D) the entity's profitability has decreased.

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