The Starch Company experiences a 20% increase in sales over the previous year. However, gross profit actually decreased by 10% from the previous year. What are some of the possible causes for an increase in sales but a decline in gross profit?
Rising costs to either manufacture or purchase inventory could be responsible for a decline in gross profit in the face of an increase in sales. Assume that 1,000 units of a product are sold with a unit cost of $75 and a selling price of $100 . Sales total $100,000, and gross profit is $25,000 . Assume that in the following year, the company raises the selling price to $120 because of rising costs. If the cost to make a unit goes up to $97.50 and the company sells another 1,000 units, sales will increase by 20% to $120,000, but gross profit will decrease to 1,000 × ($120 – $97.50), or $22,500—a decrease in gross profit of 10%.
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________ is a mechanism that constrains the aggregate emissions by creating a limited number of tradeable emission allowances, which emission sources must secure and surrender in proportion to their emissions
A) Command-and-control B) Cap-and-trade C) Cap-and-control D) Emissions tax
What is the IRR for the following project if its initial after-tax cost is $5,000,000 and it is expected to provide after-tax operating cash flows of ($1,800,000 ) in year 1, $2,900,000 in year 2, $2,700,000 in year 3, and $2,300,000 in year 4?
A) 5.83% B) 9.67% C) 11.44% D) 6.85%