Question

(d) When sales increase by 7%, which of the following should also increase by 7% in a merchandising company? (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question mark will be automatically graded as incorrect.) Variable cost Fixed cost Gross margin Contribution margin Net operating income (e) When sales increase by 7%, which of the following should increase by more than 7% in a merchandising company? (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question mark will be automatically graded as incorrect.) Variable cost Fixed cost Gross margin Contribution margin Net operating income

Answer 1

d) Variable cost and contribution margin are the answer
This is because both variable cost and contibution margin are directly proportional to sales and increase in same proportion
Other answers are incorrect because
Gross margin change in Different %
Fixed costs remain same
Net operating income will increase by more than 7%
Sales	xxxx
Less Variable Expenses	xxxx
Contribution Margin	xxxx
e)
Net operating income is the answer
Other answers are incorrect because
variable cost and contibution margin are directly proportional to sales and increase in same proportion
Gross margin change in Different %
Fixed costs remain same
Sales	xxxx
Less Variable Expenses	xxxx
Contribution Margin	xxxx
Fixed cost	xxxx
Net operating income	xxxx