Write a note on gross margin amount. How is it calculated?
What will be an ideal response?
The gross margin amount represents the amount of money we make before any expenses are subtracted. To
calculate the gross margin amount, we subtract the full absorption cost from revenue. The full absorption cost is
defined as the sum of variable costs (direct labor and materials costs) as well as overhead costs allocated to that
product line. Alternatively, we can use the term contribution margin, which is computed as revenue less variable
costs.
You might also like to view...
Which of the following interviewer characteristics is described as "is honest and behaves ethically at all times"?
A) aptitude B) price C) third ear D) ethics E) work orientation
As a consequence of many manufacturing firms attempting to reduce the number of suppliers with which they deal, vendors that supply high-quality products and reliable delivery schedules may expect increased business
Indicate whether the statement is true or false
The production data needed to calculate the standard unit cost as well as the underlying details for the standard cost per unit are provided in
A) the standard cost sheet. B) the standard production budget. C) the balance sheet. D) the standard work-in-process account. E) none of these.
A ________ for technology is important for decision-making before investment.
A. trial subscription B. consultant C. cost/benefit analysis D. competition research