COST ACCOUNTING
BREAK EVEN POINT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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The gross profit margin ratio is calculated by dividing:
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profit by sales revenue.
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profit by shareholders’ equity.
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gross profit by sales revenue.
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sales revenue by cost of sales.
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Explanation:
Detailed explanation-1: -How do you calculate gross profit margin? The gross profit margin is calculated by subtracting direct expenses or cost of goods sold (COGS) from net sales (gross revenues minus returns, allowances and discounts). That number is divided by net revenues, then multiplied by 100% to calculate the gross profit margin ratio.
Detailed explanation-2: -The gross profit margin is calculated by taking total revenue minus the COGS and dividing the difference by total revenue.
Detailed explanation-3: -The profit margin is a ratio of a company’s profit (sales minus all expenses) divided by its revenue.
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