All of the Following Statements Regarding Profit Margin Are True

question 157

Multiple Choice

All of the following statements regarding profit margin are true except:

• A)Profit margin reflects the percent of profit in each dollar of revenue.
• B)Profit margin is also called return on sales.
• C)Profit margin can be used to compare a firm's performance to its competitors.
• D)Profit margin is calculated by dividing net income by net sales.
• E)Profit margin is not a useful measure of a company's operating results.

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Definitions:

Direct Materials Quantity Variance

The variance between the real amount of materials consumed in production and the anticipated standard amount, multiplied by the cost per unit according to standards.

Direct Materials

Raw materials that can be directly attributed to the production of specific goods or services in a manufacturing process.

Variance Reports

Financial analyses that compare actual performance against planned or budgeted performance.

Form Content

Refers to the specific subject matter covered by a document or form, detailing the various elements and information it encompasses.