The Profit Margin Equals

question 98

Multiple Choice

The profit margin equals

• A)net sales divided by net income.
• B)gross margin divided by net income.
• C)net income divided by gross margin.
• D)net income divided by revenues.

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Definitions:

Process Cost Accounting System

A method of accounting used to track and allocate costs associated with the production process.

Factory Overhead

All indirect costs involved in manufacturing, excluding direct materials and direct labor; includes items like utilities and salaries for managers.

Equivalent Units

A concept in process costing that represents the amount of work done on incomplete units, expressed in terms of fully completed units.

Direct Labor

Direct labor refers to the wages paid to workers directly involved in the manufacture of products or the provision of services.