Question detail
BrightBake serves small retailers while taking a loan; the case evidence includes capacity utilisation of ?10,390, sales of 330 units, and a 27% change in costs or demand. Which option best applies Calculate gross profit margin and net profit margin ratios?
Try the question, check the answer, then read the explanation to understand the curriculum point.
At a glance
MCQ
Type
practice
Style
Topic
Quantitative skills in business
Question
- A. Use gross profit margin, profit, net profit margin to judge capacity utilisation, lenders impact, and the business objective in Calculation requirements.
- B. Give only a definition of Quantitative skills in business without using the case evidence.
- C. Treat internal and external finance as identical and ignore the effect on lenders.
- D. Choose the largest sales figure without checking costs, finance, or context.
Answer
The correct option is: Use gross profit margin, profit, net profit margin to judge capacity utilisation, lenders impact, and the business objective in Calculation requirements.
Explanation
The option is correct because Use gross profit margin, profit, net profit margin to judge capacity utilisation, lenders impact, and the business objective in Calculation requirements. The case evidence gives ?11,890, 330 units, and 27%, so the answer must explain the commercial effect rather than repeat a definition. The distractors are weaker because they confuse internal and external finance, miss the lenders, or ignore the business objective.
Common mistake
Calculation requirements common mistake 1
Giving a vague answer instead of directly addressing: Calculate gross profit margin and net profit margin ratios..
Answer by clearly explaining how to calculate gross profit margin and net profit margin ratios..
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