Which of the following would most likely increase the net profit margin ratio? A. An increase in the unit selling price. B. A decrease in the overall sales volume. C. An increase in operating expenses. D. An increase in cost of goods sold

Question

Business

Charles Griffin

1 September, 10:16

Which of the following would most likely increase the net profit margin ratio? A. An increase in the unit selling price. B. A decrease in the overall sales volume. C. An increase in operating expenses. D. An increase in cost of goods sold

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Answers (1)

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Taniya · Answer 1

An increase in the unit selling price would most likely increase the net profit margin ratio.

The correct answer is A

Explanation:

An increase in the unit selling price increases the net profit margin ratio.

A decrease in the overall sales volume reduces the total sales thereby reducing the net profit margin ratio.

An increase in operating expenses reduces the net profit thereby reducing the net profit margin ratio.

An increase in cost of goods sold reduces the gross profit, which leads to a reduction in net profit. A decrease in net profit reduces the net profit margin ratio.