Accounting for IGCSE & O level - Advanced Principles (Section 1 - No. 14)
Which of the following actions will INCREASE the gross profit margin?
Increasing the selling price of each item.
Reducing the selling price of each item.
Cutting trade discounts allowed to credit customers.
Increasing the cost of the items sold.
Selitys
Increasing the selling price or cutting trade discounts will lead to higher gross profit. Reducing selling price or increasing costs will decrease gross profit, thus decreasing the margin.