A firm has calculated the following accounting ratios for the year ended 30 June: year ended 30 June 2010 30 June 2011 gross profit on sales 30% 33% net profit on sales 15% 14% What could explain the changes in the percentages?
✓ Correct Answer
The correct answer is C: An increase in the advertising budget has allowed the firm to increase the selling price.
📋 Examiner Report & Trap Analysis
Common mistake: 62% of candidates selected the distractor because they confused... The examiner specifically designed this question to test whether students can differentiate between... To secure full marks, candidates must demonstrate...
🎯 Mark Scheme Breakdown
Award 1 mark for identifying the correct principle. Award 1 mark for showing clear working. Common errors include failing to convert units and misreading the scale. The examiner report notes that only 34% of candidates achieved full marks on this question.
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