Question

All of the following will cause a decline in a company’s gross profit EXCEPT A : clearance of discontinued inventory. B : selling products with a lower markup. C : paying lower prices to its suppliers. D : increased competition resulting in a lower selling price.

Answer 1

Answer:

c. paying lower prices to its suppliers.

Explanation:

A : clearance of discontinued inventory.  

Clearance is most often used when a shop wants to clear a particular stock line. reduce sell price with effect in gross margin

B : selling products with a lower markup.

Markups are the ratio of gross profit to sales price.

D : increased competition resulting in a lower selling price.

lower prices will lead to higher sales volumes, which may make up for the lower profit margin