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When sales increase by 3%, which of the following should also increase by 3% in a merchandising company?
A. Variable cost.
B. Fixed cost.
C. Gross margin.
D. Contribution margin.
E. Net operating income.
When sales increase by 13%, which of the following should increase by more than 13% in a merchandizing company?
A. Variable cost.
B. Fixed cost.
C. Gross margin.
D. Contribution margin.
E. Net operating income.

Sagot :

Zvikoidn

Answer:

Part 1

C. Gross margin

E. Net operating income

Part 2

C. Gross margin

E. Net operating income

Explanation:

A merchandizing company bought goods for resale rather than manufacturing and selling as seen with manufacturing companies.

The items which vary with sales in a merchandizing company are Gross Margin and Net Operating income. Such are the items that will increase with an increase in Sales.

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