Accounting 9706 · AS & A Level · Analysis and communication of accounting information

Analysis and communication of accounting information — practice question

These ratios were worked out for two businesses, each with revenue of $100000$. Gross margin: X $20\%$, Y $25\%$. Profit margin: X $10\%$, Y $10\%$. In what way do the cost of sales and expenses of X compare with those of Y?

  • Acost of sales higher, expenses higher
  • Bcost of sales higher, expenses lower
  • Ccost of sales lower, expenses higher
  • Dcost of sales lower, expenses lower

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