67.6k views
17 votes
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.

User Dflorey
by
5.3k points

1 Answer

9 votes

Answer:

Part 1

C. Gross margin

E. Net operating income

Part 2

C. Gross margin

E. Net operating income

Step-by-step 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.

User Serge Velikan
by
4.9k points