Which factor affects the operating profit margin?
A) number of units or product or services sold
B) number of units or product or services bought
C) relationships with suppliers
D) potential customers identified by sales people

Question

Quizplus · Accepted Answer

The number of units or product or services sold directly affects the operating profit margin. If a company sells more units, it can spread its fixed costs over a larger revenue base, which results in a higher profit margin. Conversely, if a company sells fewer units, its fixed costs are spread over a smaller revenue base, resulting in a lower profit margin. Factors like relationships with suppliers or potential customers identified by salespeople can indirectly affect the profit margin, but they are not direct factors.

Which Factor Affects the Operating Profit Margin