Question

Had the company maintained the gross margin in Q3 2018 as in Q2 2018, operating income would have been about:

a) Higher
b) Lower
c) Unchanged
d) Impossible to determine

Answer 1

If the gross margin remained the same between two quarters, the operating income would also be the same.

Step-by-step explanation:

The question is about the impact of maintaining the gross margin on the operating income of a company. To determine the effect, we need information on the gross margin and operating income for both Q2 2018 and Q3 2018. If the gross margin remained the same between the two quarters, the operating income would also be the same. Therefore, the correct answer is c) Unchanged.