Accounting for IGCSE & O level - Preparation Of Financial Statements (Section 10 - No. 16)
What is the relationship between the mark-up percentage and the gross profit margin?
They are the same value
They are used for calculating the selling price, but are different in percentage.
The gross profit margin is always higher than the markup percentage
The gross profit margin is always lower than the markup percentage
Explanation
The mark up is applied to the cost of goods, while the gross profit is the profit from sales and expressed as a percentage of the sales, so they are always different percentages
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