You are using a leading competitor,Company B,for benchmarking your company,Company A.When benchmarking,the gross margin of Company A is expressed as a percentage of:
A)the net sales of Companies A and B.
B)Company B's net sales.
C)Company A's net income.
D)Company A's net sales.

Question

Quizplus · Accepted Answer

When benchmarking, the gross margin of Company A should be expressed as a percentage of its own net sales. Therefore, the correct choice is D. Using the net sales of Companies A and B (A), Company B's net sales (B), or Company A's net income (C) would not accurately reflect the gross margin of Company A.

You Are Using a Leading Competitor,Company B,for Benchmarking Your Company,Company